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THE HYDROGEN ENERGY ECONOMY

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND AIR QUALITY

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MAY 20, 2003

Serial No. 108–21

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON ENERGY AND COMMERCE

W.J. ‘‘BILLY’’ TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

Vice Chairman

ED WHITFIELD, Kentucky

CHARLIE NORWOOD, Georgia

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

CHARLES F. BASS, New Hampshire

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

ERNIE FLETCHER, Kentucky

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

DARRELL E. ISSA, California

C.L. ‘‘BUTCH’’ OTTER, Idaho

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

LOIS CAPPS, California

MICHAEL F. DOYLE, Pennsylvania

CHRISTOPHER JOHN, Louisiana

TOM ALLEN, Maine

JIM DAVIS, Florida

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

DAVID V. MARVENTANO, Staff Director

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON ENERGY AND AIR QUALITY

JOE BARTON, Texas, Chairman

CHRISTOPHER COX, California

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

CHARLIE NORWOOD, Georgia

JOHN SHIMKUS, Illinois

Vice Chairman

HEATHER WILSON, New Mexico

JOHN SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

MARY BONO, California

GREG WALDEN, Oregon

MIKE ROGERS, Michigan

DARRELL ISSA, California

C.L. ‘‘BUTCH’’ OTTER, Idaho

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

(Ex Officio)

RICK BOUCHER, Virginia

(Ranking Member)

ALBERT R. WYNN, Maryland

THOMAS H. ALLEN, Maine

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BOBBY L. RUSH, Illinois

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

LOIS CAPPS, California

MIKE DOYLE, Pennsylvania

CHRIS JOHN, Louisiana

JOHN D. DINGELL, Michigan

(Ex Officio)

(II)

C O N T E N T S

Page

Testimony of:

Garman, David K., Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy ................................................... 8

McCormick, J. Byron, Executive Director, Fuel Cell Activities, General

Motors Research and Development ............................................................. 39

Preli, Francis R., Jr., Vice President, Engineering, UTC Fuel Cells ........... 55

Rips, Catherine, Director of Hydrogen Programs, Sunline ........................... 46

Samuelsen, Scott, University of California at Irvine, Mechanical, Aerospace, and Environmental Engineering ...................................................... 65

Schwank, Johannes, Department of Chemical Engineering, University

of Michigan .................................................................................................... 70

Vesey, Gregory M., President, Technology Ventures, ChevronTexaco Corporation .......................................................................................................... 59

Additional material submitted for the record:

Americam Petroleum Institute, prepared statement of ................................ 85

Samuelsen, Scott, University of California at Irvine, Mechanical, Aerospace, and Environmental Engineering, letter dated July 7, 2003, enclosing response for the record .................................................................... 89

Schwank, Johannes, Department of Chemical Engineering, University

of Michigan, letter dated July 5, 2003, enclosing response for the

record ............................................................................................................. 88

(III)

(1)

THE HYDROGEN ENERGY ECONOMY

TUESDAY, MAY 20, 2003

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ENERGY AND COMMERCE,

SUBCOMMITTEE ON ENERGY AND AIR QUALITY,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2123, Rayburn House Office Building, Hon. Joe Barton (chairman)

presiding.

Members present: Representatives Barton, Shimkus, Buyer,

Bono, Otter, Wynn, Allen, Rush, and John.

Staff present: Bob Meyers, majority counsel; Kelly Zerzan, majority counsel; Andy Black, policy coordinator; Peter Kielty, legislative

clerk; Bruce Harris, minority counsel; Jonathan J. Cordone, minority counsel; and Sue Sheridan, minority counsel.

Mr. BARTON. The Subcommittee on Energy and Air Quality is

holding a hearing today on hydrogen and the potential for a hydrogen economy.

Without objection, we are going to proceed pursuant to Committee Rule 4E, which governs opening statements by members

and the opportunity to defer them for extra questioning. Hearing

no objection, prior to the recognition of the first witness for testimony, any member who, when recognized for an opening statement

may defer his or her 3-minute opening statement and instead use

those 3 minutes during the initial round of witness questioning.

Looks like we are going to be swamped with opening statements

this morning. So the Chair is now going to recognize himself for an

opening statement.

Today we are going to turn our attention to the future of hydrogen fuel cells, vehicles powered by hydrogen, and the hydrogen

fueling infrastructure necessary to make it work. I want to thank

my colleague, the Congressman from Maryland, the Honorable Albert Wynn, for encouraging a closer look at this topic. We have the

same purpose of doing everything Congress can do to give hydrogen

powered vehicles a chance to succeed.

It is amazing to contemplate the potential of millions of vehicles

no longer needing conventional gasoline with emissions consistently near zero. H.R. 6, the Energy Policy Act of 2003, provides for

a collaborative process between the Federal Government and the

private sector. H.R. 6 foresees a fundamental decision by fueling

companies and vehicle manufacturers by the year 2015 regarding

having on-road vehicles and a fueling infrastructure deployed by

2020.

2

The 2020 deadline calls for cars to be acceptable to consumers in

terms of price, performance, and safety. As we have learned with

natural gas vehicles, a hydrogen fueling infrastructure must be

pervasive and widespread in order for mass acceptance by consumers.

In his State of the Union address, President Bush envisioned a

child born today having their first vehicle powered by hydrogen. I

might say as an aside that since in Texas it is a Texas constitutional right that you get your first car at age 16, that we are going

to have to move that up for children that are actually born today.

It may take that long because of the many technology improvements and cost reductions that must occur in addition to the development of thousands of new codes and standards. It may, indeed,

take lessons from many years of stationary fuel cell applications

before vehicles can succeed, and it may be that you cannot rush

technology.

However, we do not want to delay the project until 2020 if it can

be completed sooner than that. In fact, one of our witnesses, a gentleman from General Motors, may say that consumers could see

this new product well before then if everything goes right.

During the subcommittee consideration of H.R. 6, Congressman

Wynn offered an amendment to speed up the time table, require a

Federal fleet mandate, and to authorize additional funding for stationary fuel cell demonstrations. I asked Congressman Wynn to

withdraw his amendment, so that this subcommittee could more

fully review the issues in the Wynn amendment. Today we are having that opportunity. I want to thank Congressman Wynn for working with us on this issue.

As we move toward the expected conference on energy with the

other body, the lessons that we learn today will help us craft a hydrogen title that can achieve the vision that we all share.

We have before us witnesses from many of the different sectors

that will play a role in the future of hydrogen fuel cells and energy

infrastructure. Two of our witnesses can comment on barriers that

this growing technology application will face in the real world. I

want to welcome all of our witnesses today for their testimony.

At another hearing later in the summer, we are going to consider

the broader issues relating to the future of energy production,

where we will cover the potential for coal gasification, which could

allow coal to produce electricity with fewer emissions and the possibility of carbon sequestration. We will also explore the administration’s new future generation proposal, which could greatly improve

our ability to produce hydrogen.

A decade or two from now, Americans may look back to this Congress as the time that we inspired a new generation of vehicles, a

reduced reliance on imported oil, and a broad transition on a voluntary basis to produce the energy much more cleanly. When I

fully retire from use my 1981 Buick Century station wagon, which

I hope lasts at least half a century, you will know we, as a Nation,

are headed in the right direction.

Now I would like to recognize Congressman Wynn for an opening

statement.

3

Mr. WYNN. Thank you very much, Mr. Chairman. Before I begin,

let me request that all members on the minority side be allowed

to insert statements in the record by unanimous consent.

Mr. BARTON. Is that all members or just statements of the minority?

Mr. WYNN. Well——

Mr. BARTON. I think you said of the minority. Do you broaden

that to say all members?

Mr. WYNN. I am happy to say that, to all members.

Mr. BARTON. Without objection, so ordered.

Mr. WYNN. Now, Mr. Chairman, let me say very sincerely that

I thank you for calling this hearing. As you indicated when we

were discussing H.R. 6, the issue of hydrogen fuel cells came up,

and we talked about whether we were doing enough. You liked

what we were doing, but you certainly wanted to hear more about

it. I was very pleased at that, and I am even more excited and enthused that you have, in fact, called this hearing. I thank you for

that.

I also want to note that there is a great deal of bipartisan support for the development of fuel cell technology. And if there are

any partisan differences, it probably has to do with degree and certainly not purpose or intent of the initiative. The President’s fuel

car initiative provides $1.73 billion for the development of hydrogen

fuel cell vehicles.

His initiative, which would provide money for research and development and demonstration projects, is a step in the right direction toward the development of commercially viable hydrogen fuel

cell cars. Unfortunately, this plan would put hydrogen fuel cells on

the road between 2020 and 2025 when the U.S. is over 70 percent

dependent on foreign oil for its domestic oil consumption needs. I

believe that we should make the vehicles commercially viable by

2015.

Today, stationary hydrogen fuel cells are a reality, providing

backup electricity in some skyscrapers. Interestingly, the New York

Police Department, Central Park Station, is powered by hydrogen

fuel cells independent of the grid. In order to advance this technology, I believe that Congress should adopt a significant increase

in Federal funding for the advancement of hydrogen fuel cell technology and the production and the fueling infrastructure needed to

support the initiative.

I look forward to hearing from our industry witnesses who can

talk about the challenges in developing affordable fuel cell vehicles

and fuels.

As you mentioned, in April, I offered an amendment to provide

$5.3 billion over 10 years for the advancement of hydrogen fuel

technology. This program, like the FreedomCAR, would provide

grants for research and development and allow corporations to

apply for funding and demonstration programs.

By increasing funding and providing benchmarks for the rollout

of the technology, the amendment would help make hydrogen fuel

cell vehicles commercially viable around 2015. The things that I believe ought to be included would be elements such as research and

development funds for hydrogen production, storage, and transport

activities, as well as research and development funds for fuel cell

4

technologies to develop more economically and environmentally

sound fuel cells.

Also, we need a Department of Energy cost-sharing vehicle demonstration program to show the viability of fuel cell vehicles and

widespread commercial use as well as cooperative agreements with

the private sector to demonstrate fuel cell powered buses and

trucks. The amendment that I offered would also include a demonstration project for stationary hydrogen fuel cells.

We would also require Federal Government agencies with motor

vehicle fleets to collectively purchase 100,000 vehicles powered by

fuel cells—the first phase of developing a commercially viable vehicle fuel cell program. In order to bring hydrogen fuel cells online

in a way that makes the U.S. less dependent on the volatile world

oil market, we must move forward with the fortitude of a Marshall

Plan to bring hydrogen fuel cell vehicles online by 2015.

This not only requires additional funding but clear benchmarks

as laid out in the amendment that I introduced for the technology

to transition from stationary fuel cells to commercially viable vehicles within 15 years.

Let me conclude by saying again, thank you for holding this

hearing, and I look forward to hearing from our witnesses this

morning.

Mr. BARTON. Thank you, Congressman.

Seeing no other witnesses, we are going to start our hearing.

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. MARY BONO, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF CALIFORNIA

Mr. Chairman, thank you for holding this important hearing today.

I am very grateful that you invited Catherine Rips from Sunline Transit Agency

to testify. As you know, Sunline is located in California’s 45th Congressional District

and is a leader in this field.

President Bush has challenged Congress to move ahead with groundbreaking initiatives in hydrogen fuel cell technology. In this year’s comprehensive energy bill,

the House took the first steps in this direction by authorizing the President’s

FreedomCAR program and Hydrogen Fuel Initiative.

But we also need to work on refining other proposals. For instance, I understand

the Administration has requested a total of $100 million for the Multi-Modal Research Program. However, these monies could thin out as they are split between

fuel cells, the 21st Century Truck project as well as other programs. I would like

to learn more from Ms. Rips, and other panelists, about suggestions on improving

this program structure.

Another issue we must address is something that all alternative fuel initiatives

must face, and that is building a reliable infrastructure. If we are to ever move from

taking this technology beyond the public sector and into the garage of the average

American, we must prepare to face this question now.

Again, Mr. Chairman, thank you for holding this hearing and I look forward to

hearing today’s testimony.

PREPARED STATEMENT OF HON. C.L. ‘‘BUTCH’’ OTTER, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF IDAHO

Thank you, Mr. Chairman.

Whether through the threats of rogue nations in the middle-east, the unreliability

of OPEC, or the strikes of Venezuela, Americans have been all too often reminded

of the threat our growing reliance on foreign oil poses to our economy and way of

life.

Sadly, as the Clinton Administration sat by and watched, our nation’s reliance on

foreign oil grew steadily throughout the 1990’s peaking at nearly 60 percent. Today,

our nation’s economy is a virtual hostage to the political and economic whims of the

5

nation’s that supply our oil. Hydrogen, however, offers us a promising domestic alternative to the uncertainty and manipulation of OPEC.

I am particularly interested in the idea of producing an abundant supply of hydrogen through the next generation of nuclear power reactors in our nation. I firmly

believe that if our nation is going to meet its growing need for base-load electricity

in the future, it will have to turn to nuclear power for the answer—and in that answer we will also find a source for hydrogen.

My home state is home to the Idaho National Engineering and Environmental

Laboratory and Argonne National Laboratory West. These two facilities are on the

cutting edge of nuclear power research and development and are poised to lead our

nation’s efforts to produce hydrogen from nuclear power. I’ve met with the engineers

and scientists who work at these two world-class facilities, listened to their ideas

and enthusiasm, and am convinced they’re vision of combining nuclear reactors with

hydrogen production makes undeniable sense.

Mr. Chairman, it’s time our nation harnesses the intellectual strength and boundless ingenuity it possesses and ends its reliance on foreign oil. In doing so, we can

look forward to a day when the power of OPEC and its oil is replaced by the security of a domestically-produced energy source like Hydrogen.

Again, thank you Mr. Chairman for holding today’s hearing and I look forward

to the testimony of the witnesses.

PREPARED STATEMENT OF HON. W.J. ‘‘BILLY’’ TAUZIN, CHAIRMAN, COMMITTEE ON

ENERGY AND COMMERCE

Last year, the Oversight and Investigations Subcommittee, under the leadership

of Chairman Greenwood, examined several issues regarding the Department of Energy’s ‘‘FreedomCar’’ program, which was first announced on January 9, 2002. That

hearing examined several issues concerning the respective roles of the Department

and the private sector in this new endeavor as well as its relationship to the previous Partnership for a New Generation of Vehicles, or PNGV program.

Today, the Energy and Air Quality Subcommittee expands the focus of this committee’s review by looking not only at FreedomCar, but other efforts in the public

and private sectors. As our first witness, Assistant Secretary David Garman, will

testify, since the release of the Administration’s National Energy Plan in May of

2001, three separate but related efforts have been announced: FreedomCar, the

President’s Hydrogen Fuel Initiative and, most recently, FutureGen, a program to

develop a zero-emission coal-fired powerplant.

We cannot possibly address all issues and every aspect of these programs at this

hearing. Instead, today we will focus on FreedomCar and the related Hydrogen Fuel

Initiative. As our audience should know, both programs were authorized in H.R. 6,

the comprehensive energy bill that was approved by the full House of Representatives on April 11th. Very broadly, this legislation provides for a set of twin commitments to occur in 2015 that will lead to the deployment of hydrogen fuel cell vehicles and the necessary hydrogen infrastructure in the year 2020.

I think it is important to understand, however, that a hydrogen energy economy

is not limited to a fuel cell minivan pulling up to a hydrogen filling station in 2020,

driven by a 16 year old (born today) who somehow managed to get the keys from

mom and dad and who may have no intention of driving to the library like he promised. Instead, this new energy economy contains a massive set of interrelated efforts, which will extend throughout the fuel production, storage and distribution system and which will require a massive downstream retooling of industry and commitment of vast sums of private capital.

I think we all realize that this cannot occur in the blink of an eye. We cannot

instantly change the course of industrial and transportation history that began

roughly one hundred and forty-four years ago in Pennsylvania when the first commercial oil wells were drilled. Nor can we determine today how market forces will

respond and shape the hydrogen energy economy in its real staging ground, the private marketplace.

But I think we can agree that there are important, vital questions concerning hydrogen energy for our country and for this Congress. And I look forward to our committee’s continued examination and legislative work in this effort.

PREPARED STATEMENT OF HON. TOM ALLEN, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF MAINE

I would first like to thank the Chairman and our distinguished panelists for this

important hearing. Mr. Garman, it is nice to see you again.

6

Hydrogen and fuel cell technology presents a potentially revolutionary technology

for our nation, and we need to understand it here in Washington. This hearing will

inform members about the policy choices presented by the current hydrogen debate.

Last month this committee passed a new energy bill that funded research and development of a fuel cell vehicle. It also created an incentive payment program in

support of stationary advanced fuel cell distributed electricity generation. I hope our

speakers will address this new legislation, whether it does enough to promote this

technology, and whether it will lead to a commercial hydrogen vehicle market and

a broader hydrogen based energy system.

I have supported hydrogen fuel cell development since I joined Congress. There

is significant bipartisan support for this research. But the current bill allows industry to decide in 2015 whether or not to produce a fuel cell product. I am concerned

that we will spend nearly $2 billion and end up with nothing to show for it.

Thank you all for coming. As this committee continues to consider energy policy,

Members must be well informed about the real potential of a hydrogen economy.

PREPARED STATEMENT OF HON. SHERROD BROWN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF OHIO

Thank you, Mr. Chairman, for scheduling this hearing, and thanks to our witnesses for what I expect will be informative testimony.

Thanks are also due our colleague, Mr. Wynn, for raising the issue of hydrogen

technology commercialization during this committee’s energy bill debate. As Mr.

Wynn’s amendment illustrated, it is well worth exploring whether and how we

might bring hydrogen energy technology to the mass marketplace more quickly than

the bill envisioned.

I would add that it is equally important to make sure that when we do bring this

potentially revolutionary technology to market, we do it right. If we roll out vehicles

and infrastructure that consumers cannot use or will not buy, we risk consigning

a promising technology to the back bench. If we do not ensure that fuel production

and use are environmentally sound, the new hydrogen economy will simply trade

one set of problems for another. And if we focus exclusively on the development of

hydrogen technology for only one mode of transportation, we risk undermining the

transit systems upon which many of our constituents depend.

I am pleased to know that today’s witnesses will discuss all of those important

issues. Several witnesses will stress how indispensable it is to ensure that refueling

options are widely available by the time hydrogen-powered vehicles hit the showrooms. As Mr. Garman and several of our stakeholder witnesses will also discuss,

it is essential to ensure that the development and marketing of carbon sequestration

technology is timed to dovetail with the vehicle and infrastructure technologies to

ensure that fossil sources remain ecologically viable as sources of hydrogen. And as

we will hear, public transit systems offer a number of advantages as laboratories

for the commercialization of hydrogen energy technologies.

Let me take a moment to add my voice to the recommendation by Dr. Schwank

for active university-based involvement in this effort. Fuel cell membrane research

is one of several groundbreaking technology initiatives under development at the

University of Akron’s Polymer Center. That institution and other university-based

programs offer not only technical expertise but also an independent perspective that

will be invaluable as we work to ensure that hydrogen research is put to the best

possible use.

I would also suggest that we consider an addition to the hydrogen provision included in the energy bill. Many of the research initiatives envisioned by that legislation would likely have applications for improved motor fuel economy in traditional

gasoline-fueled vehicles. It may be worth doing more to promote the sharing of materials research and other technologies that could make a difference in environmental stewardship and energy security right now.

The notion of a federal leadership role in developing a hydrogen economy is rooted

in the Partnership for a New Generation of Vehicles, established during the1990s.

That program provided the foundation for substantial government investments in

fuel cell research, as part of a broader effort to improve the energy efficiency of

motor vehicles and the sustainability of America’s transportation systems.

The challenge now is to build on that foundation, and today’s hearing is an important step in that process. Additional hearings are necessary to ensure that the development and commercialization of hydrogen technology are advanced as quickly

and effectively as possible.

I look forward to the testimony of our witnesses.

7

PREPARED STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF ILLINOIS

Thank you, Mr. Chairman, for holding today’s hearing on the promising future of

hydrogen energy and technology. Though the 108th Congress has legislatively addressed this issue in H.R. 6, the Energy Policy Act of 2003—by way of authorizing

the FreedomCAR and Hydrogen Fuel Initiative programs—I believe it is useful for

this subcommittee to follow-up and further deliberate on the prospects of a hydrogen-based economy; and to discern the obstacles to a full-fledged transformation

down the road. The benefits of hydrogen energy are almost too good to be true: it

is an abundant, efficient source of energy that has virtually no adverse environmental impact.

Having said that, and while I share my colleagues’ optimism and enthusiasm on

the benefits of hydrogen fuel technology, I also acknowledge the obvious fact that

we are many, many years away from any sort of viable and commercial application

of hydrogen energy. First, our nation lacks the fundamental infrastructure to

produce, store and regulate hydrogen. Second, the commercial feasibility of hydrogen based products—such as hydrogen fuel cells—is still riddled with substantial

cost-of-production and technological glitches.

I point out these obvious obstacles not to be a pessimist or cynic, but only to put

things in perspective. While the Energy Policy Act is a solid attempt to speed along

the transformation process, hydrogen energy remains a long-term solution to our energy needs. We can envision and boldly articulate a promising and distant future,

but we mustn’t lose track of our immediate problems in the present day. As such,

Congress must continue to encourage the development of productive interim strategies and technologies that will serve as a bridge between our present fossil-fuel

based economy and our future hydrogen-based economy. That is, in our enthusiasm

to embrace the long-term, we must not lose sight of the short-term.

So thank you again, Mr. Chairman, for this oversight hearing on an exciting subject-matter, and I look forward to hearing the testimony of our panelists. I yield

back the balance of my time.

PREPARED STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding this hearing on a very important topic for

the future of automobiles and American energy supplies. Hydrogen fuel cells will

someday provide Americans with cars and trucks that produce few emissions and

consume less fuel. As we will hear from our witnesses today, there is still much

work to be done.

It is, however, an exciting time for the development of this technology. Earlier

this month, the Chairman and CEO of General Motors brought a variety of impressive hydrogen powered vehicles to Washington. And just yesterday I was in Ann

Arbor for the announcement of a new program sponsored by the Environmental Protection Agency (EPA), United Parcel Service (UPS), and Chrysler. The automaker

will provide hydrogen powered delivery vehicles to UPS, and the EPA and Chrysler

will monitor the real world issues that these vehicles will face, such as varying

weather conditions and stop-and-go traffic. We must continue to encourage publicprivate partnerships that will lead to the widespread commercialization of this technology, making it available to all Americans.

While we continue to develop fuel cell technologies for the long-term, we must not

forget the advanced vehicles we can produce in the near-term. With a little help,

clean diesel vehicles and hybrid-electric vehicles can be widely available to consumers sooner than you may think. In particular, I want to help diesel technology

along by improving the quality of diesel fuel and providing consumer incentives that

will increase understanding and acceptance of this new technology. By significantly

improving the fuel economy of the least efficient vehicles, clean diesel holds great

promise for reducing our dependence on foreign oil in the near-term.

As we further the development of all advanced vehicles, we must make sure that

American researchers, American manufacturers, and American workers are well

equipped to produce these vehicles for the entire world. We must bring our universities into this collaborative process early and often. I note the attendance today of

Dr. Schwank from the University of Michigan and Dr. Samuelsen from the University of California. They will have valuable insights into how we can use the resources of our academic institutions to develop this technology and produce the next

generation of hydrogen scientists.

In addition to public-private partnerships, we must encourage our manufacturers

to produce these advanced technologies here in the United States. We will not benVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
8

efit if we shift from a dependence on foreign oil to a dependence on foreign technology and manufacturing. Grant programs and tax incentives should be provided

to convert existing manufacturing facilities into advanced technology facilities. Encouraging the domestic development and production of hydrogen fuel cells and other

advanced technologies will bring us one step closer to true energy independence.

Mr. BARTON. Our first witness representing the administration is

the Honorable David Garman, who is the Assistant Secretary for

Energy Efficiency and Renewable Energy in the Department of Energy. You have testified before this subcommittee before. We are

glad to have you again. We are going to recognize you for such time

as you may consume. Welcome to the subcommittee.

STATEMENT OF HON. DAVID K. GARMAN, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

Mr. GARMAN. Thank you, Mr. Chairman and members of the

committee. I appreciate this opportunity. And in keeping with the

committee’s letter of invitation, I will focus on FreedomCAR and

the Hydrogen Fuel Initiative.

As the chart to your right shows, there is an imbalance between

domestic oil production and transportation’s demand for petroleum.

This imbalance, now around 11 million barrels a day, is projected

to keep growing. And we will not close this imbalance with regulation, new domestic production, or even both.

Although promoting efficiency in the use of oil and finding new

domestic sources of oil are important short-term undertakings, over

the long term, over the very long term, a petroleum-free option is

eventually required. We ultimately want a transportation system

that is free of dependence on foreign energy supplies and free of all

harmful emissions.

But we also have to maintain and preserve the freedom of consumers to purchase the kind of vehicles they want to drive. That

is the concept behind the FreedomCAR partnership and the President’s Hydrogen Fuel Initiative, which are designed to develop the

technologies necessary for hydrogen fuel cell vehicles and the infrastructure needed to support them.

A transportation system based on hydrogen provides several advantages. First, hydrogen can be produced from diverse domestic

resources, freeing us from a reliance on foreign imports. And, second, when hydrogen is used to power fuel cell vehicles, the combination results in more than twice the efficiency of today’s gasoline engines, with none of the harmful air emissions. In fact, the

only byproducts of the operation of fuel cells are pure water and

waste heat.

But to bring about the mass market penetration of hydrogen vehicles, government needs to partner with the private sector to conduct the research and development needed to advance investment

in a hydrogen fuel infrastructure that performs as well as the petroleum-based infrastructure that we have today, and that is going

to be a difficult task.

Our current gasoline infrastructure has been forged over the last

100 years in a competitive market. It is remarkably efficient. It can

deliver refined petroleum products that began as crude oil a half

a world away to your neighborhood for less than the cost of milk,

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drinking water, or most other liquid products that you can buy at

the supermarket.

We are currently bound to a petroleum infrastructure, and before

drivers will purchase a fuel cell vehicle they have to have confidence in a hydrogen refueling infrastructure. That is why the

President, in his State of the Union address, made a new national

commitment backed over the next 5 years by $1.7 billion for the

FreedomCAR partnership and Hydrogen Fuel Initiative.

Government is not going to build the hydrogen infrastructure.

The private sector will do that as the business case becomes clear.

But as we develop the technologies needed by the vehicles, we will

also develop the technologies required by the infrastructure.

Some of the technology challenges we face are significant. For example, we must lower by a factor of four the cost of producing and

delivering hydrogen. We also have to develop more compact, lightweight, lower-cost hydrogen storage systems. And we also have to

lower by a factor of at least 10 the cost of materials for fuel cells

themselves.

Fortunately, we are not starting from scratch. Beginning back in

November 2001, DOE began working with industry, academia, the

stakeholders on a comprehensive technology roadmap, and we have

achieved a remarkable level of consensus on what needs to be done.

As important as hydrogen is for the long term, we have maintained a robust research and development program in non-hydrogen transportation technologies as well. Under the FreedomCAR

partnership, we have proposed a funding increase in fiscal year

2004 for our hybrid technology as well as increases in materials

technologies.

Many of these technologies will deliver fuel savings, both prior

to and after the introduction of fuel cell vehicles, since lightweight

materials and hybrid technologies will be incorporated into fuel cell

vehicle designs as well as the conventional and hybrid models that

precede them.

Auto makers are introducing the technologies that have resulted

in part from DOE’s work in this area in the past. At the recent Detroit auto show, the major U.S. auto makers announced that they

would have a variety of new, hybrid gasoline electric models entering the market in the 2004 to 2008 timeframe.

Of course, hybrid vehicles are more expensive compared to conventional vehicles, which is why the President proposed a tax credit for hybrid vehicles in his national energy plan and in subsequent

budget submissions, and we urge that Congress adopt this important incentive for more efficient vehicles.

Mr. Chairman, with that, I would like to end and ask that the

rest of my testimony be entered into the record as if read, and

would be pleased to answer any questions the committee may have,

either now or in the future.

Thank you.

[The prepared statement of Hon. David K. Garman follows:]

PREPARED STATEMENT OF DAVID K. GARMAN, ASSISTANT SECRETARY, ENERGY

EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

Mr. Chairman and members of the Subcommittee, I appreciate this opportunity

to testify today.

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The President’s National Energy Plan, entitled ‘‘Reliable, Affordable and Environmentally Sound Energy for America’s Future,’’ is the blueprint for the energy future

we seek, and it makes several recommendations with regard to hydrogen.

Specifically, it directs the Secretary to develop next generation energy technology,

including hydrogen; it recommends that our research and development (R&D) programs related to hydrogen and fuel cells be integrated; and it recommends that legislation reauthorizing the Hydrogen Energy Act enjoy the support of the Administration.

Since the release of the President’s energy plan in May 2001, the President and

Secretary Abraham have unveiled several exciting new initiatives related to hydrogen. Most notable are:

• The FreedomCAR partnership announced in January 2002; • The President’s Hydrogen Fuel Initiative announced during the State of the

Union address in January 2003; and • The ‘‘FutureGEN’’ zero-emission coal-fired electricity and hydrogen power plant

initiative announced in February 2003.

Each of these initiatives plays a particularly important role in a hydrogen energy

future. Each will help make possible a future in which the principal ‘‘energy carriers’’ are hydrogen and electricity, eventually generated using technologies that do

not emit any pollutants or carbon dioxide.

Today, we are highly dependent on coal, natural gas and nuclear energy for the

majority of our electricity. We depend on oil, a growing percentage of which is imported, to power our transportation needs. Through the FreedomCAR and Hydrogen

Fuel Initiative we can eventually build a light duty transportation system that requires no petroleum, and is comprised of vehicles that emit nothing other than

water vapor.

As illustrated in my first chart (Figure One) the ‘‘gap’’ between domestic production and transportation demand is growing—and is projected to keep growing. The

current gap between total U.S. consumption and net production of oil is roughly 11

million barrels per day. Promoting efficiency in the use of oil, and finding new domestic sources of oil, are both important short-term undertakings. But over the

long-term, a petroleum-free option is eventually required.

Our energy challenge is further complicated by another important factor—the pollutants and carbon dioxide emissions resulting from our use of energy. We have

made tremendous progress in reducing pollutant emissions from our cars and trucks

as well as our stationary power sources, and we will continue to make incremental

gains through regulatory approaches such as the Tier II standards. But for true efficiency gains, we must reach to develop a wholly new approach to energy.

In his recent State of the Union address, President Bush announced a

groundbreaking plan to transform our Nation’s energy future from one dependent

on foreign petroleum, to one that utilizes the most abundant element in the universe—hydrogen.

Hydrogen can be produced from diverse domestic sources, freeing us from a reliance on foreign imports for the energy we use at home. Hydrogen can fuel ultraclean internal combustion engines, which would reduce auto emissions by more than

99 percent. And when hydrogen is used to power fuel cell vehicles, it will do so with

more than twice the efficiency of today’s gasoline engines—and with none of the

harmful air emissions. In fact, fuel cells’ only byproducts are pure water and some

waste heat.

But ultimate success in the mass-market penetration of hydrogen fuel cell vehicles

requires a hydrogen-based infrastructure that performs as well as the petroleumbased infrastructure we now have.

Our current gasoline/hydrocarbon infrastructure has been forged in a competitive

market. It is ubiquitous and remarkably efficient. It can deliver refined petroleum

products that began as crude oil half a world away to your neighborhood for less

than the cost of milk, drinking water, or many other liquid products you can buy

at the supermarket. We are currently bound to that infrastructure. Eventually replacing it with something different will be extremely challenging. But that is what

we must do if we expect to achieve success with the FreedomCAR partnership. Drivers must be able to go anywhere in America and to refuel their hydrogen-powered

vehicle before they will be comfortable purchasing one.

That is why the President, in his State of the Union address, proposed that we

in the federal government significantly increase our spending on hydrogen infrastructure R&D, including hydrogen production, storage, and delivery technologies,

as well as fuel cells. Over the next five years, we plan to spend an estimated $1.7

billion on the FreedomCAR partnership and Hydrogen Fuel Initiative, $1.2 billion

of which is for the Hydrogen Fuel Initiative, which includes resources for work on

hydrogen and fuel cells. Of the $1.2 billion figure, $720 million is ‘‘new money.’’

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We will not build the infrastructure. The private sector will do that as the business case becomes clear. But as we develop the technologies needed by the vehicles,

we will also develop the technologies required by the infrastructure. In cooperation

with the U.S. Department of Transportation (DOT), we will convene the parties

needed for technology partnerships, we will collaborate on the needed codes and

standards, and we will promote international cooperation in this effort. On April 28,

during a presentation to the International Energy Agency, Secretary Abraham

called for an ‘‘International Partnership for the Hydrogen Economy’’ to collaborate

on research and deployment of hydrogen technologies.

BENEFITS

Energy Diversity

Hydrogen can be supplied in large quantities from domestic fossil, nuclear and renewable resources. This mix of currently available and developing technology could

provide a transition from traditional to next generation energy technologies benefiting society with reliable and affordable energy in the near and long terms. Hydrogen and fuel cells can catalyze the establishment and utilization of a viable transportation market for nuclear energy, domestic coal supplies, and renewables. Carbon

capture and sequestration will be needed, however, for all carbon-based sources of

hydrogen such as coal. The fact remains, though, that our Nation possesses the necessary resources to produce large quantities of hydrogen.

Transportation

Every day, eight million barrels of oil are required to fuel the over 200 million

vehicles that constitute our light duty transportation fleet. By 2025, the Nation’s

light vehicle energy consumption is projected to grow to as much as 14 million barrels per day of petroleum or its energy equivalent. Fuel cell vehicles could provide

more than twice the efficiency of conventional vehicles. Hydrogen fueled fuel cell vehicles could make dramatic reductions in petroleum use possibly resulting in 11 million barrels per day savings by 2040.

I would like to point out that the government does not have vehicle market penetration goals. The manufacture and marketing of hybrid, fuel cell or other advanced

vehicles will be industry’s responsibility. Instead, our plan lays out the activities

that will accelerate hydrogen and fuel cell development to enable industry to make

a commercialization decision by 2015. The government’s role, however, can be broader than the removal of technical barriers and the reduction of technology costs. The

government can also contribute to the pace of both industry and market acceptance

by overcoming institutional barriers, such as those associated with achieving common codes and standards necessary for safe use of hydrogen and fuel cell technologies.

Fuel Cells for Stationary Power

Hydrogen can also be used in stationary fuel cells, engines and turbines to

produce power and heat. In order to meet our growing electrical demands, it is estimated that electricity generation will have to increase by two percent per year (reference: DOE, Energy Information Administration, Annual Energy Outlook 2002). At

this rate, 1.5 trillion kWh of additional electricity generation capacity will be needed

by 2020. Along with aging infrastructure, requirements for reliable premium power,

and market deregulation, this increasing demand opens the door for hydrogen power

systems and potential societal benefits. For example, using ten million tons of hydrogen per year to provide 150 billion kWh of the Nation’s electricity (just ten percent of the added generation) could avoid 20 million tons per year of carbon dioxide

emissions. DOE will also support work in the area of fuel cells for portable power.

While not important to overall petroleum reduction, these units will provide early

operating and manufacturing experience, and should contribute to the reduction of

fuel cell cost for polymer electrolyte membrane (PEM) fuel cells.

TECHNOLOGY CHALLENGES

Achieving the Hydrogen Economy will require a combination of technological

breakthroughs, market acceptance, and large investments in a national hydrogen

energy infrastructure. Success will not happen overnight, or even over years, but

rather over decades; it will require an evolutionary process that phases hydrogen

in as the technologies and their markets are ready. Success will also require that

the technologies to utilize hydrogen fuel and the availability of hydrogen occur simultaneously.

Some of the significant hurdles to be cleared include:

• Lower by a factor of four the cost of producing and delivering hydrogen;

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• Develop more compact, light weight, lower cost, safe, and efficient hydrogen storage systems that will enable a greater than 300 mile vehicle range;

• Lower by a factor of ten the cost of materials for advanced conversion technologies, especially fuel cells;

• More effective and lower cost (by a factor of at least ten) carbon-capture and sequestration processes (a separate program critical to fossil-based production of

hydrogen);

• Designs and materials that maximize the safety of hydrogen use; and,

• Finally, we must solve the overarching infrastructure challenges to develop a hydrogen-based delivery and refueling infrastructure comparable to the petroleumbased one we have today. The development of needed codes and standards as

well as the education of consumers relative to the use of hydrogen can help

safely establish this hydrogen infrastructure.

The Department has drafted a work breakdown structure associated with each of

the critical areas (production, delivery, storage, conversion, and end-use) identified

in the National Hydrogen Energy Roadmap unveiled by the Secretary last November. We have developed critical milestones and decision points that will help us

gauge technology progress. Examples of key program milestones that support

FreedomCAR and achievement of a hydrogen economy include the following:

• On-board hydrogen storage systems with a six percent capacity by weight by

2010; more aggressive goals are being established for 2015;

• Hydrogen production at an untaxed price equivalent to $1.50 per gallon of gasoline at the pump by 2010; and

• Polymer electrolyte-membrane automotive fuel cells that cost $45 per kilowatt by

2010 and $30 per kilowatt by 2015 and meet 100,000 miles of service life.

We are beginning to partner with energy companies to establish more specific

goals related to technology and components needed to produce and distribute hydrogen using various fossil, nuclear and renewable pathways. In this exercise, we will

be looking at the full range of hydrogen technology areas covered in the Roadmap.

In the near- to mid-term, most hydrogen will likely be produced by technologies

that do not require a complete hydrogen distribution infrastructure (i.e., using existing distributed natural gas infrastructure). As RD&D progresses along renewable,

nuclear, and clean coal and natural gas production pathways (including techniques

for carbon sequestration) a suite of technologies will become available in the midand long-term to produce hydrogen from a diverse array of domestic resources. The

economic viability of these different production pathways will be strongly affected

by regional factors, such as feedstock availability and cost, delivery approaches, and

regulatory environment.

Detailed analysis of life-cycle costs and benefits for alternative hydrogen production pathways, carbon sequestration, and other elements will continue. ‘‘Well-toWheels’’ analyses conclude that the energy and environmental benefits depend

greatly on how hydrogen is manufactured, delivered and stored, and on the economic feasibility of sequestration for fossil feed stocks. The results of these studies

will help in making down-select decisions and to ensure that the relative merits of

specific hydrogen pathways are evaluated properly and in comparison with other energy alternatives. In fact, we are now following up on a National Academy of

Sciences recommendation to establish a more robust systems analyses effort so that

we can optimally prioritize areas for R&D, as well as understand the ramifications

of future R&D successes and disappointments. Out-year planning will identify needs

for RD&D on production and storage technologies, delivery infrastructure, and education and safety/codes and standards. Public education of consumers and local code

officials must also be pursued concurrently with the RD&D.

Finally, industry must develop and construct the infrastructure to deliver hydrogen where it is needed. We will work with the DOT to help industry develop a safe,

efficient, nation-wide hydrogen infrastructure. The hydrogen distribution infrastructure can evolve along with the conversion and production technologies, since much

of the infrastructure that is developed for fossil-based hydrogen will also be applicable to renewable- and nuclear-based hydrogen. We will partner with industry to develop infrastructure in pilot projects, and industry will expand locally, regionally,

and ultimately nationally.

INTERIM STRATEGIES

As important as we believe hydrogen is for the long term, we are still working,

in cooperation with other federal agencies, to maintain a robust, and in some areas

growing, research and development program in non-hydrogen transportation technologies.

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Under the FreedomCAR partnership we have proposed a funding increase in fiscal

year 2004 for our hybrid technology, as well as increases in materials technology.

We believe many of these technologies will deliver fuel savings both prior to and

after the introduction of fuel cell vehicles, since lightweight materials and hybrid

technologies are expected to be incorporated into fuel cell vehicle designs. Therefore,

these investments are expected to pay off in the interim, as well as over the long

term.

In addition, we had a number of interim strategies in mind as we established specific, measurable performance goals for our program. And our FY 2004 budget is

aligned with these goals. For example:

• We are working to develop technologies for heavy vehicles by 2006 that will enable reduction of parasitic energy losses, including losses from aerodynamic

drag, from 39 percent of total engine output in 1998 to 24 percent;

• The 2006 goal for Transportation Materials Technologies R&D activities is to reduce the production cost of carbon fiber from $12 per pound in 1998, to $3 per

pound; and,

• The 2010 goal for Hybrid and Electric Propulsion R&D activities is to reduce the

production cost of a high power 25kW battery for use in light vehicles from

$3,000 in 1998 to $500, with an intermediate goal of $750 in 2006, enabling

more cost competitive market penetration of hybrid vehicles.

Automakers are introducing technologies that have resulted in part from DOE’s

work in this area. At the recent North American International Auto Show in Detroit, the major U.S. automakers announced that they will have a variety of new

hybrid gasoline-electric models entering the market in the 2004-2008 timeframe.

Of course, hybrid vehicles are more expensive compared to conventional vehicles,

which is why the President proposed a tax credit for hybrid vehicles in his National

Energy Plan, and subsequent to that in his 2004 budget submission. We urge that

Congress adopt this important incentive for more efficient vehicles.

And we will continue support for our Clean Cities program, a unique, voluntary

approach supporting more than eighty local coalitions that deploy alternative fuel

vehicles (AFVs) and promote supporting infrastructure.

The Administration strongly supports a renewable fuels standard (RFS) that will

increase the use of clean, domestically produced renewable fuels, especially ethanol,

which will improve the Nation’s energy security, farm economy, and environment.

As important as the RFS and the Clean Cities program are, their goals illustrate

the daunting challenges we face. Taken together, the RFS and Clean Cities are expected to offset about four billion gallons of petroleum use per year by 2010. That

sounds impressive until it is compared to the demand for petroleum for transportation uses. In the year 2000, we used approximately 130 billion gallons of gasoline

and over 33 billion gallons of diesel (highway use only). With that realization, the

critical importance of the FreedomCAR partnership and Hydrogen Fuel Initiative as

a long-term strategy becomes clear.

And, if we are to achieve real progress in the near term and our ultimate vision

in the long term, we must continue to nurture productive partnerships with the private sector. It is the private sector that will make the major investments necessary

for the transition to a radically different transportation future. Those investments

will not be made in the absence of a clear-cut business case.

TRANSITION TO A HYDROGEN ECONOMY

We consider the transition to the hydrogen economy as occurring in four phases,

each of which requires and builds on the success of its predecessor, as depicted in

Chart 2. The transition to a hydrogen-based energy system is expected to take several decades, and to require strong public and private partnership. In Phase I, government and private organizations will research, develop, and demonstrate ‘‘critical

path’’ technologies and safety assurance prior to investing heavily in infrastructure.

This Phase is now underway and will enable industry to make a decision on commercialization in 2015.

The FY 2004 budget currently before Congress is consistent with completion of

the technology RD&D phase by 2015.

Phase II, Transition to the Marketplace, could begin as early as 2010 for applications such as portable power and some stationary applications, and as hydrogen-related technologies meet or exceed customer requirements. If an industry decision to

commercialize hydrogen fuel cell vehicles is made in 2015, mass-market penetration

can begin to occur around 2020. Consumers need compelling reasons to purchase

new products; public benefits such as high fuel use efficiency and low emissions are

not enough to overcome the market advantages of the incumbent technology and infrastructure. The all-electronic car powered by hydrogen fuel cells is one example

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of an approach to greater value delivery; it could offer the consumer greater amenities, improved performance through elimination of mechanical parts and greater design flexibility.

As these markets become established, government can foster their further growth

by playing the role of ‘‘early adopter,’’ and by creating policies that stimulate the

market. As markets are established this leads to Phase III, Expansion of Markets

and Infrastructure. The start of Phase III is consistent with a positive commercial

decision for vehicles in 2015. A positive decision will attract investment in infrastructure for fuel cell manufacturing, and for hydrogen production and delivery.

Government policies still may be required to nurture this infrastructure expansion

phase.

Phase IV, which should begin about 2025, is Realization of the Hydrogen Vision,

when consumer requirements will be met or exceeded; national benefits in terms of

energy security and improved environmental quality are being achieved; and industry can receive adequate return on investment and compete globally. Phase IV provides the transition to a full hydrogen economy by 2040.

CONCLUSION

Mr. Chairman, it will take a great deal to achieve this vision of a hydrogen energy

future we are all talking about this morning. It will require careful planning and

coordination, public education, technology development, and substantial public and

private investments. It will require a broad political consensus and a bipartisan approach. Most of all, it will take leadership and resolve.

The President has demonstrated his leadership and resolve. ‘‘With a new national

commitment,’’ said the President during his State of the Union address, ‘‘our scientists and engineers will overcome obstacles to taking these cars from laboratory

to showroom, so that the first car driven by a child born today could be powered

by hydrogen and pollution free.’’

A few days later at an event on energy independence featuring new uses for fuel

cells including automobiles, the President reiterated his commitment to his new Hydrogen Fuel Initiative stating, ‘‘The technology we have just seen is going to be seen

on the roads of America. And it’s important for our country to understand that by

being bold and innovative, we can change the way we do business here in America;

we can change our dependence upon foreign sources of energy; we can help with the

quality of the air; and we can make a fundamental difference for the future of our

children.’’

We believe that the benefits the President envisions are attainable within our lifetimes and will accrue to posterity, but they will require sustained work and investment of public and private financial resources. We at the Department of Energy welcome the challenge and opportunity to play a vital role in this Nation’s energy future and to support our national security in such a fundamental way.

This completes my prepared statement. I would be happy to answer any questions

you may have, either now or in the future.

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Mr. BARTON. Thank you, Mr. Secretary.

The Chair would recognize himself for the first 5 minutes, so we

are going to use the clock for this. The first thing is, is the Department of Energy, under the President’s hydrogen initiative, the lead

agency in the administration?

Mr. GARMAN. Yes, sir.

Mr. BARTON. Which other cabinet agencies are involved in the

initiative?

Mr. GARMAN. We will work very closely with the Department of

Transportation, as they play a very critical role in terms of safety

of vehicles, and certification of vehicles. We will work very closely

with the Environmental Protection Agency. We will work with the

Department of Commerce. There is a role for the NIST on standards and technology. And we think that all of this is going to be

coordinated through our work and the work of the Office of Science

and Technology Policy at the White House.

Mr. BARTON. What about the Environmental Protection Agency?

Mr. GARMAN. Absolutely. If I failed to mention them, they are a

part of this effort as well.

Mr. BARTON. And the Department of Defense?

Mr. GARMAN. Yes, sir. Actually, I think both in stationary and

transportation applications, as well as work in the heavy truck

technologies. We have been a partner in the past with the Department of Defense, and we will continue to be a partner with DOD

in the future.

Mr. BARTON. Within the Department of Energy, which Assistant

Secretary has primary responsibility? I know that you kind of coordinate it, but which of the assistant secretaries is involved? Or

if there is more than one, which ones?

Mr. GARMAN. Absolutely. We actually have a draft departmental

posture plan under the guidance of the Undersecretary, Robert

Card, for Energy, Science, and Environment. Under Mr. Card, the

assistant secretaries or office directors that are involved in the hydrogen initiative include myself, the Office of Science, the Office of

Nuclear Energy, the Office of Fossil Energy.

We are all working closely together on a coordinated plan, because, just as an example, the value of hydrogen is that it can be

produced from diverse resources. And we want to make sure that

we are leveraging our fossil resources, and our nuclear resources.

We also have a great deal of synergy with the Office of Science

doing basic research in such areas as microbes that actually

produce hydrogen, or different types of material science that can

really pay benefits in the work we are trying to do.

Mr. BARTON. How many different working group levels are there?

Is there a senior policy level that you would participate in with the

other cabinet agencies? And then, are there working groups at the

professional SES staff level? And, you know, how often do they

meet?

Mr. GARMAN. There is a couple of different working groups. The

primary working group is run out of the White House and the Office of Science and Technology Policy. They have been meeting at

least once a month, sometimes more frequently. I or members of

my staff participate in that working group.

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We also have, as an example, weekly meetings on international

collaborations on hydrogen that occur in my office. Undersecretary

Card has at least a quarterly review, and quite often more often

than that.

Mr. BARTON. Do you feel that there is adequate coordination and

organization within the Bush administration for this initiative? I

mean, the President listed it as one of his priorities. Is it being

given that type of preferential importance/emphasis in the administration, given the high priority the President gave it in his State

of the Union address?

Mr. GARMAN. Yes, sir. I think that it has the almost-daily attention of the Secretary. We have worked very closely with Dr.

Marburger at the White House, with the Council on Environmental

Quality, Mr. Conniton, the Chairman of CEQ, on the policy coordination activities that usually the White House leads. We have not

been lacking for resources or high-level attention to this at all.

Mr. BARTON. I have got time for probably one more question. The

hydrogen that is produced today is primarily produced from natural gas using a steam reforming technology. Does the Bush administration have a preference on the source of hydrogen, or are

you open to all kinds of sources?

Mr. GARMAN. Yes, sir. As you mentioned, virtually all of the hydrogen that we produce today is produced from natural gas. And

the value of hydrogen, the fundamental value that we see, is that

it can be produced from a variety of resources. That is what is so

compelling about the hydrogen vision.

We would like to have a future where we have a multitude of resources and processes available to us that produce hydrogen. This

can include renewables, of course. It can include nuclear energy. It

can include fossil energy. It is—we have a vast supply of coal in

this country. It is possible to do integrated combined cycle coal gasification.

Mr. BARTON. My time has expired.

Mr. GARMAN. Yes, sir.

Mr. BARTON. I don’t want to cut you off, but my time has expired.

But the basic position of the Bush administration on fuel source for

hydrogen is open.

Mr. GARMAN. We are looking at all sources.

Mr. BARTON. Okay. My time has expired. I would recognize the

gentleman from Maryland for 5 minutes.

Mr. WYNN. Thank you very much, Mr. Chairman, and thank you,

Mr. Garman. I really appreciated your testimony.

A couple of questions. You state on page 4 that only $720 million

is actually new money. Is that correct?

Mr. GARMAN. That is correct.

Mr. WYNN. Okay. I don’t want to appear adversarial, but after

all of the ballyhooing between the State of the Union and other

speeches, are we really down to $720 million, this fuel cell initiative and FreedomCAR, beyond what we were going to do anyway?

Mr. GARMAN. The $720 million is above and beyond what we had

planned to do in these programs anyway.

Mr. WYNN. Okay.

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Mr. GARMAN. This is truly new money. And that is just over a

5-year commitment. We anticipate there will be a funding beyond

that timeframe. We are just talking about the 5-year timeframe.

Mr. WYNN. At the risk of putting you on the spot, is it fair to

say you could use more money?

Mr. GARMAN. The question is——

Mr. WYNN. If you answer no, I am going to be incredulous.

Mr. GARMAN. Well, actually, this is a question we are asked a lot.

And the question is: Could you accelerate the timeframe if you

were provided more money? And the answer is perhaps, but we

would also increase the risk. There is a value of time in the discovery process and of research and demonstration that feeds back

into the R&D.

Mr. WYNN. What is the risk?

Mr. GARMAN. For instance, if we were to have to actually field

vehicles in the 2010 or 2015 timeframe, we would have to settle on

some technologies very early that might not turn out to be the correct technologies.

Mr. WYNN. So your proposal would be to experiment with technologies over a period of time. Let me ask you a second question.

Could you chart out a timeline for us? You’ve introduced a very interesting argument, which is we are going to have to have an experimental phase regarding the technologies. Could you chart out

a timeline? How long is that phase likely to take?

Mr. GARMAN. Actually, I do have a chart. Jodi, if you could just

flip that chart. This gives a notional timeline of—and you probably

can’t see that from there, but it——

Mr. BARTON. Do we have that on the big screen? Can we get it

up on video? Because if we can, it is bigger.

Mr. WYNN. Since my time is running pretty rapidly, just give me

a date. About how many years are we going to use to experiment

with technologies?

Mr. GARMAN. Well, we expect to be in a position so that automakers and energy companies can make business decisions in 2015

to commercialize a vehicle. That means we are going to be trying

demonstrations and activities prior to that time.

We actually have a 2010 goal for most of our key component

technologies. We would like to be able to say that by 2010 we will

have, if you will, broken the code on the key fundamental technologies that we have got in terms of the cost of fuel cells, hydrogen storage, and some of the other technology challenges we face.

Mr. WYNN. Okay.

Mr. GARMAN. Now, the business case sometimes takes a little

longer.

Mr. WYNN. Okay. Let me move on. Between vehicle development

and infrastructure development, can you tell us how these issues

are prioritized, and what role will the Federal funding play in

each? What role will Federal funding play, for example, in reducing

the storage capacity requirements, lowering the cost factor for production, versus what contribution Federal funding will make toward infrastructure development? I guess which really is, storage

is more infrastructure, and related infrastructure needs.

Mr. GARMAN. You have touched on a number of very important

needs in all of these areas. I mean, I can give you some examples.

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For example, in storage the technical challenge is storing enough

hydrogen onboard the vehicle that gives the vehicle the kind of

range that a consumer will require between refuelings.

And right now we don’t have a technology that will enable

enough hydrogen to be stored onboard the vehicle to deliver that

kind of range. You want 300 to 350 miles before you need to refuel

the vehicle.

For some technologies on solid metal hydride storage, chemical

hydride storage, and other methods of storing hydrogen, including

high pressure storage, more work needs to be done on materials to

do that. Hydrogen is a very tricky material. You just can’t put

10,000 psi in a metal cylinder, for instance, because the tiny size

of the hydrogen will actually start migrating into the matrix of the

metal. So you have some special challenges with hydrogen.

Mr. WYNN. About how long do you think it will take us to work

through some of these infrastructure challenges?

Mr. GARMAN. It is difficult to foresee. We are certain—we think

that in terms of the cost of fuel cells we see a path forward that

doesn’t require a big technology breakthrough. It just takes time.

On the issue of storage, we think we are probably going to need

a technology breakthrough. There is going to have to be a discovery

in a lab where somebody finds a hydride or another material that

will store hydrogen, hopefully at ambient temperatures and pressures, and we don’t have that today. And it is hard to put a

timeline on a scientific discovery.

What we do want to do is to put the Federal funding out there,

get the national labs involved, and make sure that different pathways are being explored fully.

Mr. WYNN. Thank you very much.

Mr. BARTON. We are going to do two rounds of questions for the

administration witness, so the gentleman will have plenty of time

to get in more questions.

The gentleman from Idaho is recognized for 5 minutes.

Mr. OTTER. Thank you, Mr. Chairman. Mr. Chairman, I had an

opening statement, which I realize I—without objection, I would

like that to be submitted into the record.

Mr. BARTON. It is already not objected to being put in the record.

Mr. OTTER. Assistant Secretary Garman, can you tell me how the

hydrogen program is being coordinated between all of the various

agencies that are going to be dealing with ‘‘energy and energy production’’? For instance, the Office of Energy Efficiency, the Department of Energy. And, in particular, how the hydrogen budget is

going to be handled by all of these varying agencies?

Mr. GARMAN. Let me start with the Department of Energy, and

then I will move up. At the Department of Energy, we have a coordinated plan between my office, the Office of Energy Efficiency

and Renewable Energy, the Office of Science, the Office of Fossil

Energy, and the Office of Nuclear Energy. We all report to Undersecretary Card, who is playing the coordinating role in our hydrogen posture activities.

The Office of Energy Efficiency and Renewable Energy is sort of

the subleader of this. We have the most money involved, and we

do most of the work on both hydrogen production and the vehicle

21

technology work. But we are very well coordinated. We have a posture group that meets frequently.

Above the Department of Energy in ensuring coordination with

other Federal agencies, of course, are the White House groups, the

Office of Science and Technology Policy, and the Council on Environmental Quality. They are both exercising a policy coordinating

role, as is the Council of Economic Advisors out of which a lot of

domestic policy derives from the White House.

We have a very tight and close group. We are in nearly constant

communication, and that is how the general policy effort is coordinated.

Mr. OTTER. Mr. Secretary, who is the boss? Where does the buck

stop?

Mr. GARMAN. I think the buck stops primarily with Secretary

Abraham. Secretary Abraham looks to me and Undersecretary

Card, because the way this initiative was developed included a lot

of policy time with the President. And the Secretary laid this out

for the President, and I think the President looks to the Secretary

to deliver on the promises and the assurances that the President

was given.

Mr. OTTER. Well, you know, I appreciate the high level of folks

that are involved in this. But as you know, the grunts are the ones

that are going to do the work, and they are the ones that are also

going to come up with the problems, and the resolution of those

problems has got to be fairly fast in order for a program that is this

important and holds this much promise for us to be able to go forward.

And has there been any scheme or any notion presented where

that is all coordinated in just one office and put in one office, and

all of the answers come from that office, and all of the coordination

comes from that office?

So many times I have found—and I appreciate the fact that I

have only been here for 3 years now, or less than 3 years—but so

many times it seems to me when you go to one agency that is supposed to have the responsibility for coordination between some government program you end up with, ‘‘Well, that is not in our pay

grade, and that is not our responsibility.’’

I think that this is way too important to us for energy self-sufficiency and also for energy independence for us to scatter amongst

the many bureaus and departments and not have one place that we

can go to and say, ‘‘You are simply not doing the job. You are going

to be replaced.’’

Now, I have met with Secretary Card, and I think he is doing

a tremendous job. And I love his enthusiasm for the hope and for

where he wants to go, and especially, of course, for my part being

from Idaho where the Argonne National Laboratory is, I hope,

going to play, could play, will play a major role in this.

But on the other hand, I have seen so many times where we

spend a lot of money, we get a lot of motion, and precious little

progress. And I would just hate to see it scattered so far and wide

that nobody knows where the hell to go to surrender when they

have got a problem.

Mr. GARMAN. I think there is a couple of things that we have

working for us in this regard. First of all, and this is part of the

22

President’s management agenda and the importance that he places

on linking budget and performance, we have set very specific technology goals that are measurable and for the achievement of which

we are accountable.

These technology goals for FreedomCAR can be understood, they

can be measured, and our performance against those goals—these

are expressed in terms of 2010, what we want to achieve between

now and 2010—can be evaluated on how well we are doing, where

we are falling behind, and where we are ahead.

We expect, because this is a high level Presidential initiative, we

expect to be subjected to scrutiny, not only by the White House but

the Congress on a regular basis on how we are achieving these

goals. And we welcome that scrutiny, and we think we are up to

the task.

Mr. OTTER. Thank you.

Thank you, Mr. Chairman.

Mr. BARTON. Thank you.

The gentleman from Louisiana is recognized for 5 minutes.

Mr. JOHN. Thank you, Mr. Chairman, for holding this hearing.

And I want to thank the Assistant Secretary for coming and starting off a debate on an issue that is really going to be critical to the

future of America.

I want to follow up on a line of questioning from the chairman

as it relates to the feedstock issue. You had mentioned in your last

remarks to the chairman, that the Bush administration is open, because it is intriguing, in your own words, to the variety of options

that we have to produce hydrogen.

And as I look down, there are several things that I notice. First

of all, I am a firm believer that money follows priorities in this

body in Congress and really everywhere we go. And if you look at

the fiscal year 2004 and the administration request, I think it

itemizes and prioritizes the different types of feedstock by placing

dollars in different kinds of feedstock.

If you look at them, of course, nuclear is $4 million, coal is $5

million, natural gas is $2.2 million, and, of course, renewables is

$17.3-.

Mr. GARMAN. Actually, $12.2. If——

Mr. JOHN. $12.2. What did I say? I am sorry.

Mr. GARMAN. $2.2. I am sorry.

Mr. JOHN. I am sorry. Yes, I have it written. I just didn’t say it

correctly. So I think that that kind of gives us an indication of

where we want to put our emphasis on technologies on research.

What I would like for you to do is to talk to me a little bit about

the economies of each one of those, and then we will talk about the

challenges of each one of those, and then try to end in my 5 minutes about, why you believe that, over $10 million was put in renewables as opposed to nuclear, coal, or something else.

Mr. GARMAN. Part of the reason that you see that split is in part

because government likes to—and it is more appropriate that we

engage in very long-term R&D. If you want a fully sustainable energy system, you would like over the long term to be able to depend

on renewables and have renewables the basis of your hydrogen production.

23

Mr. JOHN. And I agree with that. And while we are there, help

educate me on the renewables. What is the renewable feedstock of

choice for a variety of reasons?

Mr. GARMAN. One method is simply using electrolysis from a renewable produced electricity—for instance, wind power—producing

electricity from which you use electrolysis to split the water. That

is one process. You can use any form of electricity to do advanced

electrolysis.

Another is gasifying biomass. Were we to have, for instance, 600

million metric tons a year of biomass, that could take the form of

corn stove or wheat straw, different kinds of things that farmers

generally leave in the field today.

Mr. JOHN. Rice hulls?

Mr. GARMAN. Rice hulls, you name it. And we can convert that,

gasify that. That is also a hydrogen source. We are hoping that we

can, for instance, get the price of biomass down to around $2.60 a

kilogram in terms of the cost of the hydrogen produced from the

biomass. That will depend on a number of things, but that is, for

instance, a kind of notional 2010 target that we have in mind.

We have to do a lot better than that. A kilogram of hydrogen is

roughly equivalent to a gallon of gasoline. So $2.60 gasoline doesn’t

quite cut it for us.

Mr. JOHN. Okay. We only have about a minute. Talk to me about

the economies of each one of those.

Mr. GARMAN. Sure.

Mr. JOHN. I mean, good, bad, challenging, not there?

Mr. GARMAN. As I said, biomass via gasification we think we can get by 2010 in for $2.60 per kilogram. Advanced electrolysis, we

think by 2010 maybe we can get close to $2.50 a kilogram. Solar

high temperature thermochemical cycles, that is where we use very

high temperatures, on the order of 1,000 degrees Centigrade, using

high temperature and a chemical cycle to split water. That is relatively expensive. We think that is probably around $4 a kilogram.

In theory, if we have a high temperature gas reactor, which we

do not have in this country, you could use that same heat offput

from a high temperature gas reactor to do the same thing—

thermochemical water-splitting. Theoretically, we think we can get

around $2 a kilogram with that approach.

There are other approaches, including something we call photolytic. It is very long term. It uses photons directly from the sun,

kind of like a solar cell, but instead of converting the photons to

electricity and then using the electricity to make hydrogen, the conversion is direct. We think we are probably above $20 a kilogram

in that area. But it still is a long-term play, if you will.

Natural gas, we think we can get natural gas derived hydrogen

down to $1.50 per kilogram in 2010. It is currently around $5 or

$6.

Mr. JOHN. If you could—Mr. Chairman, I would like to maybe

ask for an additional minute, so we can get through this, or should

we wait until the next round?

Mr. BARTON. No, go ahead.

Mr. JOHN. Okay. I would like to ask for another minute and a

half.

Mr. BARTON. Without objection, let us give you 2 more minutes.

24

Mr. JOHN. Okay. Thank you.

Mr. BARTON. When the clock gets to——

Mr. JOHN. This is very——

Mr. BARTON. When the clock gets to three. How about that?

Mr. JOHN. That is fine.

Mr. BARTON. All right.

Mr. JOHN. Thank you, Mr. Chairman.

Mr. GARMAN. Natural gas we think is the near-term supplier for

a couple of reasons. First of all, we make around 9 million metric

tons of hydrogen each year today for a variety of purposes. We need

40 million metric tons to fuel a fleet of about 100 million vehicles,

and we are already making 9 million metric tons.

Natural gas has an advantage in that we already have a distribution system in place that is delivering the natural gas to fueling stations and locations all over the country. We have already

demonstrated the fact that we can take natural gas at a fueling

station, convert it to hydrogen, run a stationary fuel cell, and store

the hydrogen to fuel vehicles. We have such a station in Las Vegas.

We have other stations in California and elsewhere, where we

are demonstrating this technology today. So we know that works,

and we know that that is one pathway for a near-term hydrogen

infrastructure that won’t depend on large central manufacture of

hydrogen and dedicated hydrogen pipelines.

Over the long term, we will probably want to achieve the economies of scale possible from central large manufacture and production of hydrogen and the use of hydrogen pipelines. So that is the

thinking—near term, natural gas; long term, diverse resources.

Mr. JOHN. Okay. We are out of time. I would like to continue this

maybe in the next round of questions.

Thank you, Mr. Chairman.

Mr. BARTON. Thank you.

Does the gentleman from Indiana, Mr. Buyer, wish to ask questions?

Mr. BUYER. I have one I was thinking about on a safety—from

the safety standpoint. Some years back, there were some workers

in the shuttle program—when the shuttle had returned, they went

in and they were doing an inspection. The worker collapses. The

second worker goes in really concerned, and then he collapses.

They both died. And as it turns out, it was a hydrogen—some leakage.

I have always remembered that, because how awful that must

have been if it was a small quantity, and they didn’t know, and,

bang, it got them. So from a safety standpoint, could you talk about

that, if you have leakage and at what quantities? If that is part of

the considerations? Obviously, it should be.

Mr. GARMAN. Absolutely. And the real safety concern with hydrogen is not toxicity. It is flammability. But there is also an advantage of hydrogen, which makes this not a great concern. I think

those NASA workers that you spoke of probably encountered this

hydrogen in a very enclosed space where it was highly concentrated, and the real danger to them is it displaced the oxygen

that they would normally have available.

Hydrogen is the lightest element on the periodic table, and, as

a consequence, you will not find free hydrogen on the planet anyVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
25

where. It is always bound up in a compound, such as water or coal

or some hydrocarbon or some other chemical. And the reason is, it

is so lightweight it can actually escape the gravitational pull of the

earth.

So when you do have a release of hydrogen, it dissipates very

quickly and disperses, and that minimizes any problem you would

have such as the NASA workers, and it also minimizes the problem

inherent of its flammability. Like any fuel, hydrogen has a high energy content. It is flammable, but——

Mr. BUYER. Well, let us break it down to—I am Bubba, okay? I

don’t work with this compound. So with NASA workers obviously

going into a tank that is a closed, confined area, leakage—you can

understand perhaps why they died.

Now we are advanced in the future, and I have got my fuel cell

automobile, and we go in to have it refueled. Is that something that

you envision somebody else doing?

Mr. GARMAN. No, sir.

Mr. BUYER. Or is that something that I could do on my own?

Mr. GARMAN. You would do it on your own.

Mr. BUYER. And if there were some kind of leakage or if—or even

from—say you had an auto accident, and it began to leak. You

don’t anticipate any problems?

Mr. GARMAN. Not from a toxicity standpoint. In fact, because we

are so attuned to safety and ensuring that there is no leakage of

hydrogen, either on board the vehicle or during the refueling process, every hydrogen vehicle you see today has a very sensitive and

redundant system to detect hydrogen leaks and alert the driver if

they do exist. And, again, your concern is not so much toxicity but

flammability.

Mr. BUYER. All right.

Mr. GARMAN. And in that, were you to have an accident in a hydrogen vehicle, I think you actually have an advantage over a gasoline vehicle, and here is why. Should you have a breach in the hydrogen container, the hydrogen being far lighter than air is going

to move up and away from the vehicle.

Contrast that with the situation you have when you have an accident in a gasoline vehicle. If you have a breach in the tank, the

gasoline spreads below the vehicle. And, of course, if it engulfs, it

engulfs the vehicle and its occupants. So I think I would rather

drive my family in a hydrogen vehicle than a gasoline vehicle, and

the safety issues are—while very serious, something that we and

the Department of Transportation will be taking a close look at.

Mr. BUYER. Let me ask this, switching gears. When you close

your eyes and you try to envision what the future may be, how do

we here in Congress ensure that the marketplace is open, fair, and

competitive, when we try to eliminate these vertical integrations

that could possibly occur? How do you envision the marketplace?

Mr. GARMAN. I think we have to look——

Mr. BUYER. And when I say that, competitively in infrastructure

as well as others.

Mr. GARMAN. We are in the process right now of inviting major

vertically integrated oil companies, if you will. They usually don’t

refer to themselves that way anymore. They start to refer to themselves as energy companies now, because they realize the hydrogen

26

age is coming, and they want to be in a position not only to sell

you the gasoline you buy in your vehicle, or the Slurpee that you

go in and get when you go in and buy your gas, but they also want

to be the ones to provide you with the hydrogen or whatever it is

going to take to fuel your vehicle.

That is the business they are in, so they are engaged with us.

They are working with us. They are excited about this possibility.

And if we don’t use market forces to help make this transition,

then we are really missing out on the greatest force for change that

we have available to us.

The reason that I think the hydrogen economy and hydrogen vehicles are going to come about is not only because of the commitment the President made, it is because it is going to make available to consumers a better car than the kind of car they can buy

today, which has advantages that the car today that they have

can’t provide.

That is going to be an intriguing market driver, and I think that

is what we want to take advantage of. It is a little bit like the government’s involvement in the creation of the internet. We created

the basic technology, and we developed standards and protocols,

but it was the market that built the internet, driven by consumer

demand and consumer dollars. And I see the hydrogen infrastructure operating very similarly to that.

Mr. BUYER. Thank you.

Mr. BARTON. The gentleman from Maine is recognized for 5 minutes for questions.

Mr. ALLEN. Thank you, Mr. Chairman.

And thank you, Mr. Garman, for being here. This is an interesting and important subject.

I wanted to come back to, you know, where the fuel comes from.

Is there something called the national hydrogen energy roadmap?

Mr. GARMAN. Yes, there is.

Mr. ALLEN. Yes. And is that prepared by the administration?

Mr. GARMAN. This is a copy of the roadmap, and I will be happy

to provide it to you or for the staff for the record, however you want

it. It was prepared, actually, by a couple hundred folks. The administration convened it, but we invited everyone from Exxon Mobil to

the National Resources Defense Council to come and gather in a

room and start to think about the technology challenges and the

technology roadmap we needed to develop.

Mr. ALLEN. I haven’t seen the whole thing, but I was told that

in the roadmap 90 percent—the plan is, at least in that document,

for 90 percent of all the hydrogen for this program to be refined

from oil, natural gas, and other fossil fuels, with the remaining 10

percent cracked from water using nuclear energy. Is that an inaccurate statement or——

Mr. GARMAN. The reason that that would be a difficult statement

is it depends on the timeframe.

Mr. ALLEN. Yes. Well, the near term—I take what you say and

accept what you say about the near term, that natural gas is the

only logical place to get hydrogen. But one of my questions is—the

long term is harder to predict. And in particular, natural gas is

now the fuel of choice for our electric utilities.

27

And when I talk to people in the energy industry, at least some

of them, you know, are concerned about the long-term supply. If

basically both our electric generation and our automobiles are

going to be—ultimately go back to, you know, another fossil fuel to

be sure of the cleanest fossil fuel, natural gas, but that has—there

is a question about, you know, how much of it is there over the

long term, and also what the price will be, because part of the goal

here to make a hydrogen car affordable has a lot to do with whatever the market price happens to be.

Would you mind making just a couple of comments on that pricing issue and how we can—and just if you could add in one thing.

As I understand the program that we passed, there is really no requirement that Detroit ever put a vehicle on the road. I mean, this

is all a research project essentially.

Mr. GARMAN. Okay. First of all, with respect to availability, we

believe that there are a variety of methods that we have available

to us to make sufficient amounts of hydrogen. And I will just give

you an example. If, as a Nation, we made a determination that we

wanted to make 40 million metric tons of hydrogen, enough to fuel

a fleet of 100 million vehicles, and we wanted to make it solely

from wind power, we could do it with the wind capacity of the State

of North Dakota alone.

That is a possibility. I am not sure that the market would evolve

that way, but that is a possibility, and it illustrates the fact that

we have a diverse amount of resources that can produce the necessary hydrogen that we need.

So availability we think is there. If we can get the technologies

to produce wind power at an affordable price, we would have very

affordable power, and wind power has been getting more and more

and more competitive. And so I am bullish, as a long-term play, on

hydrogen from wind-generated electrolysis. I think there is something in that, and I think we can do it, and I think we as a Nation

have the capacity to do it.

On the question of price—price is, of course, a driver. I went

through some of the numbers a little bit earlier. The thing you do

have to remember is that because a fuel cell vehicle is 2 to 3 times

more efficient than a gasoline vehicle, you will get more work out

of an equivalent amount of hydrogen than you do gasoline.

Mr. ALLEN. If I could just follow that—relate that to the car I

drove to New York this weekend. I drove to New York from Portland, Maine, and back this weekend, 550 miles. I got 48 miles to

the gallon. I was in a Toyota Prius that I own that I bought because I couldn’t buy a hybrid from Detroit.

And I know that the emissions from that car are about 10 percent, I think, of the emissions from the, you know, ordinary new

car on the road. How does that hybrid technology, which is already

there for people who want to buy it in this country, relate to this

hydrogen project? And if you can, say why the administration

didn’t do more. I know there are incentives, but why not do more

to encourage hybrid technology?

Mr. GARMAN. That is a terrific question, and I want to start, as

a Prius owner myself—point out that I am a huge believer, and we

are a huge believer in hybrid technology. That is why the President

asked for a tax credit for purchasers of hybrid vehicles, in order to

28

help promote that technology. And it is a great near-term technology.

Over the long term, the total system efficiency of a fuel cell vehicle is much, much greater than that of even a gasoline hybrid electric vehicle, even when you take into account the energy inputs you

have to make to make the hydrogen, and compress the hydrogen.

I am talking about a total well-to-wheels efficiency number.

A gasoline hybrid electric vehicle, on a well-to-wheels basis, is 15

percent efficient. That includes the efficiency of the fuel chain and

the vehicle itself.

A fuel cell vehicle fueled with hydrogen produced from natural

gas is 22 percent efficient, and that includes the energy inputs you

need to create the hydrogen, compress it, and the rest. So that is

a huge efficiency increase that can’t be denied.

And the great thing about hybrid technology is that it is a pretty

good bet that you will employ hybrid technology in a future fuel

cell vehicle as well, so that you will hybridize that vehicle. And

most of the fuel cell vehicles we drive today are hybridized to give

the drivability that you want.

Mr. ALLEN. Thank you very much.

Mr. BARTON. The gentlelady from California is recognized for 5

minutes.

Ms. BONO. Thank you, Mr. Chairman. I actually have no questions at this time. I just want to thank the Secretary for all of your

hard work, and your staff as well, and I look forward to working

with you. And I yield back.

Mr. BARTON. The gentleman from Illinois, Mr. Rush, is recognized for 5 minutes.

Mr. RUSH. Thank you, Mr. Chairman.

Mr. Garman, this question might have been asked and answered

in my absence, but I want to try to get to it again if it has been.

Implicit in any government subsidy is the assumption that unfettered market forces alone is inadequate—they cannot inadequately

achieve public good or outcome. In other words, by investing $1.7 billion over 5 years for

FreedomCAR and for hydrogen fuel initiative programs, we in the

Congress assume that the private sector alone was incapable of developing a hydrogen-based fuel economy. Can you tell us exactly

how DOE will use these funds, this $1.7 billion, over the next 5

years to overcome natural private sector market barriers that exist

to developing hydrogen energy?

Mr. GARMAN. Yes. And we will be doing work on—in a variety

of different areas, including production and delivery of hydrogen.

Let me back up a little bit. Right now, as you point out, there is

not a financial incentive for General Motors, for instance, to build

a fuel cell car, or Exxon Mobil, for instance, to put hydrogen in at

the corner filling station.

There are some terrific public benefits that could be garnered—

lower dependence on petroleum, cleaner air, but those benefits are

not monetized in the marketplace, such that consumers would pay

for them or that people would make money delivering that benefit.

As a consequence, we believe that we can apply R&D activities

in a few key areas, including production and delivery, storage, safety codes, standards, utilizations, technology validation. We are

29

going to have to do some demonstrations to demonstrate the technology. Some of these demonstrations are occurring today at small

levels, such as, in California, SunLine Transit.

What we need to do is to scale these up a bit, put more cars on

the road, understand what the shortcomings are, feed back into the

R&D activity to address those shortcomings, and get the confidence

that we need that the fuel cell vehicle can be as good as, and, in

fact, better, than the vehicles that consumers can choose and drive

today, because ultimately, you know, we are focused like a laser

beam on that consumer choice test that will confront all of us in

the 2015/2020 timeframe.

We have tried different mandates and formulas and incentives in

the past, but at the end of the day if you really want this technology to succeed, you have to offer the consumer something better

than they can drive today. And that is part of our thinking. We

think that there is a benefit for automakers with this technology,

and there are benefits for consumers that will drive both automakers and consumers in this direction.

Mr. RUSH. It seems as though this—and a hydrogen-based economy is at least some decades away. And in the meantime, we have

to face pragmatically our various energy needs, and we have to face

them in an innovative and creative way. And what is DOE doing

in the interim to bridge the gap between the fossil fuel-based economy and the hydrogen-based economy?

Mr. GARMAN. Well, the most inexpensive way of reducing energy

use is to make current energy use more efficient. And that is the

primary goal, if you will, of my office in DOE, and we spend more

money on enhancing energy efficiency, through the weatherization

program, through vehicle technologies programs, through partnerships with industries, and a whole host of other programs, than we

do on anything else in my office, because efficiency—improving the

efficiency of current use is job one.

And I think that is reflected in the work of this committee in the

energy bill. So I think in the short term the answer is efficiency.

That is your quickest and cheapest way to reduce the demands of

energy use on the environment and our pocketbooks.

Mr. RUSH. Thank you, Mr. Chairman. I yield back.

Mr. BARTON. Thank you. The other gentleman from Illinois, Mr.

Shimkus, is recognized for 5 minutes.

Mr. SHIMKUS. Thank you, Mr. Chair, and I apologize for being

late. But this is a great hearing, and, of course, this is something

my friend from Maine and I have discussed ad nauseam at different forums. But I think the thing—even though there are sometimes things that separate us, I think what unites us is this is exciting, and we—the sooner we can get here, the better.

I would also be interested in getting a copy of the national hydrogen energy roadmap, because a lot of discussion will be about, you

know, the fuel. Since I am a conservative, market-driven individual, instead of the government eventually trying to pick winners

and losers on the fuel, what we—I think what would be best to do

is to set the standards and allow the different—the market force

to then move to produce the best competitive fuel for the particular

use.

30

I always talk about natural gas quite a bit, because natural gas,

I don’t think, is a choice for most electricity generators. It is a higher cost, and we use it for peaking. We use—for the most part in

this country use coal. We use nuclear. We use a lot of options. In

the midwest, natural gas is best used for home heating. That is not

true in the northeast, but it is probably the most efficient way to

use natural gas.

When we, as a government, try to distill policies to pick winners

and losers on the commodity end, we, in essence, disenfranchise all

of the other folks out there. So that is why I am interested in the

energy roadmap and what has been discussed about the possible

input fuel.

I know there is great research going on at Southern Illinois University at Carbondale with coal and the production of hydrogen

from that fossil fuel, which we find is exciting. I will be also interested in biomass issues with—of course, with my focus on corn and

soybeans, which is no surprise of my chairman here.

But we want to make sure that as we move to this that all of

the input, the commodities, are given a goal, and then we allow

technology to flow in that direction to let the market choose the

best fuel for the best use, which will also allow us to—for the best

fuel for the best use in other arenas, whether that is home heating

or whether that is electricity generation. That is this whole reason

why we have the big energy debate that we have to some extent.

So I just wanted to get that on the record.

We also are excited about—and I know we have got panelists in

the next group with what will be planned here with the cars and

the fueling station with the Shell consortium and GM, which has

a real world application upfront, close and personal.

I don’t think my three boys who are growing and our luggage

will fit in the Prius on a drive from Maine to Washington, DC. But

I think there are some hydrogen vans that I observed that might

be able to fit us all in there, which, again, just lends itself to the

great opportunities for the future.

I guess the biggest hurdle and the question I have had is the—

and you have probably addressed it, and I apologize if you have—

but obviously, for that fueling station to be placed on the hill, there

is going to be concern—first of all, there would be the concern of

the cost for the individual, and you had mentioned that a little bit

also. It was in the tail end on the security issues from my colleague

from Indiana.

How do we go about alleviating those fears and concerns? And

how do we incentivize the placement of infrastructure to provide

the fueling stations for this new technology?

Mr. GARMAN. The cost and the safety and the security aspects

are part of our research, development, and demonstration activities

now. We actually just put a competitive solicitation on the street

offering up to $150 million in cost-shared activities related to demonstration and technology validation, to actually get cars and stations on the road in prototype, in different geographical areas, so

that we can see what works, what doesn’t work, how to drive the

costs down.

We have already done a little bit of work. We probably have,

what, 10 or 15 hydrogen refueling stations in the country now. In

31

each one we make more and more improvement in lowering the

cost. That is indeed very important.

In terms of incentives, I think it is too early to talk about

incentivizing the placement of fueling stations in a market setting,

because, frankly, we want to make some progress on the technology.

But Congress, in its wisdom at some point, says, ‘‘Well, let us do

a production tax incentive, or a tax credit to incentivize.’’ But we

are not there yet on the hydrogen vehicles or the infrastructure.

When the technology and the costs get in the ballpark, then I think

it is ripe to start talking about how we incentivize the placement.

Mr. BARTON. The gentleman’s time has expired.

We are going to start our second and last round of questions for

the administration witness, and the Chair is going to recognize

himself.

I am going to feed on what—a little bit what Congressman John

was asking and Congressman Allen, and also Congressman

Shimkus. I want to try to get some definition on the base case

model or the base case goals for the efficiency or the cost of hydrogen.

In my congressional district, my town meeting reference case for

cost of gasoline is somewhere between $1 a gallon and $1.25 a gallon. When gasoline is at that price level, I don’t have too many

complaints. But when it gets above it, you know, my town meeting

reference model people start, ‘‘Congressman, what are you doing

about the cost of gasoline?’’

So is there a goal for the reference case of what the equivalent

cost per whatever of hydrogen should be to make it accepted in the

marketplace as you were talking to Congressman Allen? And what

is the unit of measure? Is it—you said kilogram. Is it kilogram? Is

it MM BTU? Is it—you know, who knows? What are we—if the

Congress set a target to the administration, ‘‘We want fuel cells,

hydrogen mobile source fuel cells for cars and trucks, to cost no

more than the equivalent cost of, say, $1.50 a gallon gasoline,’’

what would that be?

Mr. GARMAN. You have just expressed our 2010 R&D goal for the

cost of hydrogen from natural gas. Our published FreedomCar goal

is $1.50 per gallon of gas equivalent.

Mr. BARTON. And what is that in hydrogen?

Mr. GARMAN. It is roughly a kilogram.

Mr. BARTON. So you want hydrogen to be no more than $1.50 per

kilogram.

Mr. GARMAN. Roughly. And that is untaxed. We haven’t talked

about taxing.

Mr. BARTON. We don’t allow any talk about taxing in this subcommittee.

Mr. GARMAN. Very good, sir. I won’t get into that, then.

Mr. BARTON. This is not the Ways and Means Committee.

Mr. GARMAN. But our R&D goal for 2010 is $1.50 per gallon of

gas equivalent from natural gas.

Mr. BARTON. And is there—again, when you were referring to

Congressman John, he kind of led you through the different

sources and their costs. Is there any reason to believe that some

of the non-conventional sources of hydrogen, i.e., you know, some

32

of the renewables and perhaps even nuclear, can they get to that

level? Is there any reason to believe they can’t with enough technology research?

Mr. GARMAN. I don’t think they can get to that level by 2010.

Mr. BARTON. But at some point in time.

Mr. GARMAN. At some point, breakthroughs make a multitude of

things possible.

Mr. BARTON. So you see a transition starting with natural gas as

the choice of fuel to get to hydrogen.

Mr. GARMAN. Yes.

Mr. BARTON. But over time some of these more non-conventional

renewable sources kicking in——

Mr. GARMAN. Yes, sir.

Mr. BARTON. [continuing] if we invest in them.

Mr. GARMAN. If we make hydrogen from coal, we want to be careful to also be able to develop the carbon capture and sequestration

technology that makes that possible, because we don’t want to taint

hydrogen as a clean energy carrier with a dirty method of production. We do not want to do that, despite what some I think of the

administration’s critics have said.

But it is possible, if we are making hydrogen from coal, and we

have sequestration technologies that are $15 per ton of carbon

emissions avoided, we might be able to get the price of hydrogen

down below $1 from coal. And, of course, that is a very big ‘‘if,’’

being successful on the sequestration side, and that is a very important part of this equation over the long term.

Mr. BARTON. But if we could do that, that would be a good thing,

since we have——

Mr. GARMAN. That would be a——

Mr. BARTON. [continuing] a lot of coal resources in this country.

Mr. GARMAN. Your constituents would be happy about the price.

Mr. BARTON. We all want happy constituents.

Mr. GARMAN. Yes, sir.

Mr. BARTON. That is a non-partisan goal is happy constituents

on both sides of the aisle. Talk a little bit about the government

role in infrastructure investment. I used to have a natural gas-powered vehicle, and I finally gave up on it, because it was a real pain

in the bottom to fuel it.

Mr. GARMAN. That is right.

Mr. BARTON. I had to get the post office to put in a fueling station in Ennis, Texas, because there were no commercial gas—natural gas stations. And then, TXU put in fueling stations in the Dallas Metroplex, but you couldn’t go up and use your Visa card. You

had to get a special natural gas credit card from TXU, and they

didn’t really know how much you were using.

You had to estimate each month how much you used, and it was

just an accounting nightmare, because I couldn’t have a corporate—I couldn’t allow a corporation to subsidize the cost of the

fuel or I would break the ethics rules. I mean, it was just—so I finally said the heck with it. Plus, I didn’t have a trunk in the car

because of the tank.

Mr. GARMAN. Right. It is full of the tank, yes.

Mr. BARTON. So is there a Federal Government role in the infrastructure side of the hydrogen issue?

33

Mr. GARMAN. There is, not only in developing the technologies,

but we will see over time what kind of incentives might be necessary for that. We have had a lot of experience through the Energy Policy Act goals related to natural gas vehicles.

Fundamentally and honestly speaking, I think the real issue

with natural gas vehicles, and the reason I don’t think they are

going to catch on is because they don’t offer a consumer something

markedly different than the car they are driving today.

You purchase a natural gas vehicle, you are going to probably

pay a little bit more up front, you are going to have a more difficult

time refueling it, as you have experienced, and you are probably

going to get a little less money for it when you sell it. And it is

going to drive very similarly, almost precisely like your current car.

So what is really in it for you? Why would you, as a consumer,

do that? Natural gas vehicles have superb applications in fleets,

which is terrific. But this is not the case for personally owned,

light-duty vehicles. And the reason I think that hydrogen is different is some of the concepts that some of the automakers are unveiling on hydrogen vehicles.

It is truly something revolutionary and remarkable that gives

you a different kind of driving experience and a different kind of

opportunity than anything you can have today. And a case in point

is the General Motors vehicle that they call the autonomy or the

hy-wire. You can think of it as a vehicle on a 6-inch chassis with

all of the electromechanical components you need for the vehicle in

this chassis with a very low center of gravity, and on top of that

vehicle you can put any variety of body styles you want—SUV,

roadster, sports car, it doesn’t matter.

And not only does that make it easier for the automaker, because

instead of having to have a variety of platforms to offer a variety

of models, the automaker can just have one or two platforms to

offer a variety of different models for different niches of the market.

And you can even have one chassis with two different bodies if

that is what you want, depending on what you want you drive on

a given day. And that is something——

Mr. BARTON. Have one for the wife, one for you, and one for the

teenage son and daughter.

Mr. GARMAN. Or maybe you want to keep the chassis for 20

years and get a new body every 2 or 3 years. This is the concept

that GM has unveiled as just one example, and there are others

as well.

Mr. BARTON. My time is way over, so I am going to have to cut

it off. But we appreciate the answer to that, and we look forward

to working with you.

The gentleman from Maryland is recognized.

Mr. WYNN. Thank you, Mr. Chairman.

Mr. Garman, I take it that there will be multiple sources of generation of hydrogen, based on the President’s allocation of resources

that Mr. John has indicated. Now, there is $5 million in for coal

in 2004. Is that restricted to clean coal technology?

Mr. GARMAN. Yes. It would be restricted, really, to gasification

technologies, which lend themselves to a good cleanup and——

Mr. WYNN. Clean coal.

34

Mr. GARMAN. [continuing] sequestration, yes.

Mr. WYNN. Is there any prioritization? Is natural gas No. 1? Followed by coal? Followed by alternatives? Or is it some other order?

Mr. GARMAN. I don’t believe there is.

Mr. WYNN. Okay.

Mr. GARMAN. I think it is a question of timing.

Mr. WYNN. Okay.

Mr. GARMAN. The near-term priority is natural gas, just because

that is what we will need——

Mr. WYNN. Okay. The government contribution to the sequestration process, is that where we really come in with Federal grants?

Mr. GARMAN. I understand that is a topic of a later hearing in

this committee, but sequestration technology is very important if

you want to use coal to make hydrogen.

Mr. WYNN. So that is another step that would be required.

Mr. GARMAN. If you want to make hydrogen without emitting

carbon dioxide into the atmosphere, that is what you need to do.

Mr. WYNN. Do you have a recommended figure for the government’s contribution to that process?

Mr. GARMAN. The FutureGen project, which my colleague in fossil energy who is not here today, is more——

Mr. WYNN. Just a ballpark. I am not trying to pin you down.

Mr. GARMAN. What the President is trying to do is he has announced a billion dollar initiative called FutureGen, and——

Mr. WYNN. Is that all sequestration and recapture?

Mr. GARMAN. That is focused on both electricity generation and

hydrogen generation on a net zero emissions basis, meaning——

Mr. WYNN. Is that above the $5 million for coal that is provided

in the 2004 budget?

Mr. GARMAN. That is right.

Mr. WYNN. Okay. Do you believe that as part of the phase-one

government investment that there ought to be a commitment to a

government fleet of hydrogen vehicles when they are not commercially available but when the technology makes them available?

Mr. GARMAN. I think that government, at the appropriate time—

and I can’t tell you when I think that appropriate time will be—

but I think it is very important for government to be a good first

customer of this technology.

Mr. WYNN. What would be the size of the vehicle fleet you would

envision for the government commitment?

Mr. GARMAN. I can’t make that estimation. And if you would like,

I might want to take that question for the record and do some

thinking about that.

Mr. WYNN. Okay. You make a comment that the administration’s

plan to accelerate hydrogen and fuel cell development will enable

industry to make a commercialization decision by 2015. What does

the government have to do in order for the industry to make that

decision by 2015?

Mr. GARMAN. Well, I think we have to, again, in a partnership,

in a cost-shared basis with industry, we have to achieve all of our

technology goals that we have set forth. And we hope to achieve all

of these technology goals by 2010.

Mr. WYNN. So if we do that by 2010, are we then in a position

for the industry to start making its commercialization goals?

35

Mr. GARMAN. If we achieve all of the technology goals by 2010,

I think that industry would be hard-pressed to say they can’t make

the car unless there was some kind of problem with the hydrogen

infrastructure.

Mr. WYNN. Okay. In the next panel, both the University of

Michigan and the University of California testify that current hydrogen fuel cell programs are not adequately utilizing our universities to the fullest extent. They also talk about the loss of young

talent from the schools to industry. Is this an area that you believe

the government has a role?

Mr. GARMAN. We just put $150 million on the table last week on

inviting universities to partner with other partners to help move

some of this dollar into research labs, not only in universities but

in national labs, the private sector, and elsewhere. We think

universities——

Mr. WYNN. So it is not solely universities. They are competing

against private labs again. I am speaking specifically of universities.

Mr. GARMAN. Right.

Mr. WYNN. How much for just universities?

Mr. GARMAN. I will have to provide that for the record.

Mr. WYNN. Would you——

Mr. GARMAN. Yes, sir.

Mr. WYNN. [continuing] provide that information?

Mr. GARMAN. But in general, we like to offer research on a competitive basis.

Mr. WYNN. Okay. Finally, looking at your map there, the government’s role is infrastructure support. What do you envision us

doing in terms of infrastructure support to address the concern the

chairman raised about how you fuel up your new hydrogen car?

Mr. GARMAN. Part of that is in the technology validation or demonstration activities for which we just put $150 million on the

table. We think that there is a lot of learning that needs to be

done, and we have already done a lot of work.

For instance, we have safe hydrogen refueling available today at

several locations around the country. We are still working on what

is the right kind of vehicle fueling infrastructure interlock that

makes sure that no hydrogen escapes when you are refueling the

vehicle. We are still making sure that we have a totally safe and

convenient refueling experience for a customer when they go to refuel a hydrogen vehicle.

And, of course, we are still working on bringing down the costs

of compressors, storage technology, and other things that would be

associated with a hydrogen infrastructure. Cost and reliability are

some of our major drivers in this R&D work.

Mr. WYNN. All right. Thank you very much.

Mr. GARMAN. Thank you, Congressman.

Mr. SHIMKUS [presiding]. The Chair recognizes the gentlewoman

from California. Mary, do you seek time to——

Ms. BONO. No, thank you, Mr. Chairman.

Mr. SHIMKUS. Then, the Chair recognizes the gentleman from

Maine, Mr. Allen, for 5 minutes.

Mr. ALLEN. Thank you, Mr. Chairman. I will try to be brief.

36

Mr. Garman, I think this is a good project. I mean, there are

benefits from a hydrogen-based economy and a hydrogen-based vehicle fleet that are obvious—cleaner air, emission from auto—from

vehicle emissions is the most obvious. I have a couple of concerns.

No. 1, there is the concern we have already talked about, which

is how much emissions, particularly how much in the way of carbon emissions, come from creating the hydrogen itself. And I am

also wondering about the arguments you make to—the arguments

you make for—not you, but anyone might make for a hydrogenbased economy.

So I have two questions there. One is, can you say whether or

not the kind of conversion to a hydrogen-based vehicle, fleet of vehicles that you are anticipating, would that reduce our dependence

on fossil fuels? And, two, would it reduce our dependence on foreign

sources of fossil fuels? I mean, those are the two questions that remain in my mind.

Thank you.

Mr. GARMAN. If we look back on this first chart, you see that

what we portray there is the entire amount of oil demanded by

transportation. And if you look at automobiles and light trucks specifically, this is our target. This is the market for which we think

fuel cells are most suited. Heavy trucks, rail, shipping, air—these

are not a fuel cell market, except in some niche applications.

So you can see the petroleum reduction benefit that would accrue

were you to change the entire light-duty fleet over to hydrogen fuel

cells.

Mr. ALLEN. Mr. Garman, I missed your comment when this chart

went up at the beginning of the hearing. Could you explain that

to me?

Mr. GARMAN. Sure.

Mr. ALLEN. How do I see that?

Mr. GARMAN. That chart basically portrays declining domestic

production of petroleum against the ever-increasing demand for petroleum in the transportation sector. And that is projected out to

2020. And were I to have a bigger chart, you just see that there

is really no end to the growth that is projected.

So what this tells you—if we are fully successful, we believe that

by—and I have to caveat this heavily, because when you are talking about predicting the future there is a wrath of uncertainty.

Mr. ALLEN. I am with you on that.

Mr. GARMAN. But we think that it is possible that by 2040 lightduty vehicle oil consumption could be reduced by 11 million barrels

per day. And we predict that by 2040 light-duty vehicle carbon

emissions are reduced by more than 500 million metric tons of carbon equivalent. So this is the brass ring, Congressman. This is the

method.

We have done some other analyses where we try to map the impact of increased CAFE or drilling in the Arctic National Wildlife

Refuge. And while we think both of these things are important,

they don’t change the game. This is the only technology we know

of that can change the game and still make available to individual

consumers and Americans this freedom of personal mobility that

they have come to expect.

37

Mr. ALLEN. One quick question. The line for domestic production,

that is the domestic production for oil?

Mr. GARMAN. Yes, sir.

Mr. ALLEN. And is the assumption in drawing the line that that

is the trend that you expect? I mean, that is not a line that is affected by decisions about hybrids or hydrogen vehicles, or anything

like that.

Mr. GARMAN. No.

Mr. ALLEN. That is just the line you expect for——

Mr. GARMAN. Domestic production is on a downward trend, and

we have a relatively mature petroleum province here in the United

States where a lot of the petroleum that is available has been explored.

Mr. ALLEN. Okay. Good. Thank you.

Mr. SHIMKUS. Thank you. And I am going to just follow up with

a couple questions. On the chart there, domestic production, does

that refer to the crude storage of reserves in the United States? Or

does that include imported crude? And does that include refinery?

What does that tell me?

Mr. GARMAN. That is just simply domestic crude oil production

in million barrels per day.

Mr. SHIMKUS. Domestic, not——

Mr. GARMAN. Domestic.

Mr. SHIMKUS. So you are not addressing imported.

Mr. GARMAN. No, sir.

Mr. SHIMKUS. Okay. And I am glad to see you have got your able

assistant Jodi Hansen working. We are know her well, and that is

good.

The last question is: the future gen project—you should be receiving a letter—DOE should be receiving a letter from Congressman Costello, my colleague, with an invitation to visit Southern Illinois University at Carbondale to go over all of the stakeholders

in our desire to obviously promote, we think, a very suitable location for the DOE to look at.

That has my full support, and I am using this opportunity to formally lobby you in front of millions of Americans that we have a

good place for that to be located, and that is in Southern Illinois.

So if you would follow up on that.

And with that, having no other individuals here, we would like

to thank you for your time, and then we will call the second panel.

Thank you, Mr. Garman.

Mr. GARMAN. Thank you, Mr. Chairman.

Mr. BARTON. The second panel can be seated. We want to welcome our second panel from the private sector. The Chair is going

to recognize Congresswoman Bono to make a personal introduction

of one of her constituents.

Ms. BONO. Thank you, Mr. Chairman. I am happy to welcome

Catherine Rips today. She is from my district, California’s 45th

Congressional District, and she is a leader in the field of alternative fuel research and development. She is representing SunLine

Agency, and she has been with them since 1997. In her current capacity, she is responsible for hydrogen advocacy, public education,

and project development.

38

Welcome to Washington, DC. I hope you enjoyed the commute.

I do it every week, so hopefully you will have some sympathy for

me now. Glad to have you here.

Thank you, Mr. Chairman. And you very much for inviting her.

Mr. BARTON. Thank you.

The Chair also wants to briefly, on behalf of Congressman Chris

Cox, recognize Dr. Scott Samuelsen. Congressman Cox had hoped

to be here to introduce you to the panel, but he is Chairman of the

Homeland Security Select Committee and he is involved in a hearing with that committee.

But I asked his staff to put together a small introduction, and

they gave us a page of single-spaced comments. Professor Scott is

from the University of California at Irvine. He directs various research projects on clean and renewable energy sources, including

hydrogen refueling research for the South Coast Air Quality Management District and hydrogen-fueled vehicle market research with

the University of California Institute for Transportation Studies.

He has just recently directed the introduction of the first commercial hydrogen fuel cell vehicle into the United States. Over the

next 6 months, he is going to oversee the installation of two public

refueling stations in Orange County. So he has got a distinguished

career in the issue before us, and we are very happy on behalf of

Congressman Cox to welcome you to the subcommittee.

We also have Mr. Byron McCormick, who is the Executive Director of Fuel Cell Activities for a small company called General Motors. We are glad to have you.

We have introduced Ms. Rips. We have Dr. Francis Preli—is

that——

Mr. PRELI. Preli.

Mr. BARTON. Preli. Who is Vice President of Engineering for UTC

Fuel Cells. We have Mr. Greg Vesey.

Mr. VESEY. Vesey.

Mr. BARTON. Vesey. See, my staff told me how to pronounce

these, and I have already botched two of them. So I apologize. The

staff got it right. I can’t read their hieroglyphics here. He is President for Technology Ventures for the ChevronTexaco Corporation.

We have introduced Dr. Samuelsen, and we have Dr. Johannes

Schwank. Did I get that right? One out of three is not too bad. Dr.

Schwank is with the University of Michigan, the Department of

Chemical Engineering.

Lady and gentlemen, we are going to recognize each of you, and

we are going to start with Mr. McCormick. We are going to ask

that you try to summarize your testimony in 5 minutes. And if you

go a little bit over, you know, that is acceptable. So welcome to the

subcommittee.

39

STATEMENTS OF J. BYRON McCORMICK, EXECUTIVE DIRECTOR, FUEL CELL ACTIVITIES, GENERAL MOTORS RESEARCH

& DEVELOPMENT; CATHERINE RIPS, DIRECTOR OF HYDROGEN PROGRAMS, SUNLINE; FRANCIS R. PRELI, JR., VICE

PRESIDENT, ENGINEERING, UTC FUEL CELLS; GREGORY M.

VESEY, PRESIDENT, TECHNOLOGY VENTURES, CHEVRON

TEXACO CORPORATION; SCOTT SAMUELSEN, UNIVERSITY

OF CALIFORNIA AT IRVINE, MECHANICAL, AEROSPACE, AND

ENVIRONMENTAL ENGINEERING; AND JOHANNES

SCHWANK, DEPARTMENT OF CHEMICAL ENGINEERING, UNIVERSITY OF MICHIGAN

Mr. MCCORMICK. Mr. Chairman, members of the committee,

thank you for the opportunity to be here to testify on behalf of General Motors. I am Byron McCormick, the Executive Director of General Motors, Fuel Cell Activities. And I guess put simply, I head

the team that is developing both our hydrogen and fuel cells, as

well as the vehicles that use them.

Fuel cells and hydrogen are the core of GM’s advanced propulsion strategy. We are improving fuel economy and emissions of our

vehicles by executing a comprehensive, three-phase strategy, including advanced internal combustion engines, new transmissions,

as well as hybrid vehicles.

But the ultimate and most important initiative we have is to establish leadership in hydrogen and fuel cells. And so today I would

like to tell you why General Motors believes hydrogen and fuel

cells are so critically important.

I think as Secretary Garman said, fuel cells running on hydrogen

fuels are ultimately the most environmentally friendly vehicles, because their emission is only water. Fuel cell vehicles are on the

order of twice as efficiency as the internal combustion engine, have

no pollution, have no pollutant emissions, and are quiet.

The fuel cell vehicles enable, very importantly, energy feedstock

diversity, which will increase energy independence and introduce

competition in energy pricing. And so to some of the questions we

heard earlier, once you get that competition and some of the volatility that we think about in the petroleum markets certainly has

dissipated, and then hydrogen fuel cells also can substantially reduce greenhouse gas emissions.

Fuel cell vehicles, on a well-to-wheel basis, using current technology demonstrate the potential to greatly reduce the greenhouse

emissions, and over time we think we can really drive that down

to a very low number.

Fuel cells also enable innovative vehicle designs that show promise of being more compelling, affordable, and, in the end, sustainable than today’s vehicles. I think the important point that I want

to make around this subject is that for all the technology we talk

about, it doesn’t do any good if the consumers don’t buy it. And so

this notion of the compelling vehicle is absolutely critical to this

transition we are talking about.

Finally, fuel cells are potentially not only the source of transportation power but electric power, and I want to expand on that a bit

in several dimensions. The development of this technology will create more environmentally compatible distributed electric power

generation possibilities.

40

And, in fact, an extension of that is that the automobile could

provide electric power for some homes and work sites, particularly

during peak times. For example, if only 1 of 25 cars in California

today were a fuel cell vehicle, their generating capacity would exceed that of the electric utility grid, because a typical car has

maybe 50 to 75 kilowatts of electrical power, where a typical house

uses 7 to 10 kilowatts at peak load.

GM’s commitment to fuel cells is clear. We have spent more than

$1 billion to date, and the number is growing.

The investment in our fuel cell program has yielded outstanding

results. In the last 4 years, we have decreased the size and weight

of our fuel cell stack for a given power by a factor of 10. With each

new generation of technology, we have also greatly reduced the cost

and complexity of our stacks, and we are now able to start fuel

cells in freezing conditions, down to minus 40 Celsius, in less than

a minute, which is, of course, one of those critical parameters if you

are going to have cars out there on the road.

We have also created the autonomy fuel cell concept, which Secretary Garman referred to, and a drivable version of that called the

hy-wire. These vehicles combine fuel cells and what we call by-wire

electronics—that is, sort of aerospace technology—in a revolutionary way that genuinely reinvents the automobile.

These designs could make vehicles both more affordable and

more compatible for our customers, because they enable substantially enhance functionality with fewer vehicle components, a

longer life chassis, and a smaller number of vehicle architectures.

And all of that actually leads to a better business proposition for

us in terms of the capital intensity of our business.

As several people have noted, we are also testing fuel cell vehicles in the real world. Over the next few years, we will be fielding

several small—and I want to emphasize small—demonstration

fleets, because while the technology is immature, I don’t think you

want to put too many out there.

And, of course, as somebody noted earlier, GM and Shell recently

began a joint demonstration program here in Washington, DC to

test fuel cell vehicles and the hydrogen fueling technology. This is

a 2-year program, which began earlier this month, and it will give

government officials like yourselves and your staffs the chance to

experience first hand not only driving fuel cell vehicles but, in fact,

fueling them.

These milestones represent remarkable progress. In fact, we believe our rate of progress will allow us to market stationary fuel

cells mid-decade, and we have already started to do that, and introduce hydrogen fuel cell vehicles by 2010.

Now let us talk about the challenges, and I guess there are three

in general—hydrogen storage, cost, and the fuel infrastructure. Relative to hydrogen storage—this is really an important issue—GM

has demonstrated both cryogenic liquid and compressed hydrogen

storage tanks in our prototype vehicles, and, in fact, here in Washington you will be able to experience both.

While these methods will definitely suffice for early market introduction and early volumes, over the long term we should seek solid

storage technology, such as chemical or metal hydrides, which will

41

more efficiently and cost effectively store progressively more hydrogen on board the vehicle.

Relative to cost, inside General Motors are key challenges costs.

Our goal is to attain a cost target of $50 per kilowatt for our fuel

cell propulsion system That is not just the fuel cell; that is hydrogen in to torque at the wheels by 2010. And this equates to the cost

of a conventional internal combustion engine.

As we reduce the cost, you get automotive scale applications.

Many attractive business opportunities for stationary fuel cells are,

in fact, developed. In fact, we see distributed electric generation as

a key stepping stone to the introduction of fuel cell vehicles.

Working with our strategic partner, we have developed several

fuel cell generators using the same fuel cell technology we are

using in our vehicles. Earlier this month—again, here in Washington, DC—we announced an agreement by which Dow Chemical

will purchase 35 megawatts of fuel cell power from General Motors.

Under the 7-year agreement, 500 fuel cell units will convert—

and this is one of those cases, where does the hydrogen come from?

This is a co-product of their chemical industry, and we will convert

that directly into electricity in Freeport, Texas.

Real-time power markets and common interconnection standards,

therefore, are really key for these small-scale fuel cell power units

to roll out of the lab, and, by extension, help us with the fuel cell

vehicles. And I think it should be really emphasized here as we

talk about the infrastructure that a hydrogen fuel cell distributed

electric generator is a potential hydrogen filling station, since hydrogen, by definition, is available at that location, which means

that the distributed electric generation grid is a critical stepping

stone to creating the hydrogen infrastructure.

The third challenge we have to overcome is developing and implementing business models for the deployment of the hydrogen infrastructure. We talk about central manufacture and distribution,

but I think we should emphasize that hydrogen can as well be generated at local filling stations from gasoline, natural gas, using an

appliance-like device called a reformer.

Hydrogen also offers the potential for home refueling using either

an electrolyzer or natural gas at home, and this takes advantage

of the fact that water, electricity, and natural gas are readily available at our homes and businesses.

Relative to natural gas, there should be sufficient supplies of natural gas to produce hydrogen in the early years of fuel cell introduction. We estimate that if we had 1 million fuel cell cars on the

road, and all of the hydrogen of those cars came from reformed natural gas, it would demand above our current usage of natural gas

two-tenths of 1 percent.

If you had 10 million fuel cell vehicles, it would increase the current demand by about 2 percent. And I might note that the

desulfurization of gasoline that is used in our cars uses a lot of hydrogen generated from natural gas. That is the way you actually

get the desulfurization. If you use that, it turns out you could

power 10 percent of the fleet just by converting the hydrogen that

is used to desulfurize today to hydrogen that you could power vehicles with.

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So where is General Motors? We recognize that to make this

transition is going to require a three-way partnership involving certainly the auto industry, certainly energy companies, or people who

may become energy companies—I don’t want to restrict it to just

the folks that are there—and government certainly to successfully

commercialize hydrogen fuel cell vehicles, and, importantly, stationary applications.

There are a number of areas where the government could have

an immediate impact. We would welcome an extension of the national R&D initiative on hydrogen storage, and, again, leverage

government labs, universities, and industrial research organizations.

We would like to see an aggressive similar R&D program focused

on breakthrough fuel cell materials, but those beyond the 2010/

2015 timeframe that we are commercializing. We also believe that

Department of Transportation should undeclare hydrogen as a hydrogen material and treat it as a fuel.

And since the Federal and State agencies will have a role in

transition to the hydrogen economy, they should begin that process

by evaluating the use and impact of hydrogen fuel cell technologies

on their operation.

And finally, and perhaps most importantly, the government

should take a lead in developing national templates of code standards that will be required for hydrogen fuel cells and, again, importantly, electric distributed generation.

To summarize, we see that fuel cells are the long-term power

source. We see hydrogen is the long-term fuel. With continued

progress in the technology, we think fuel cell vehicles will be cost

competitive by the end of this decade. We think stationary fuel

cells will pave the way for fuel cell vehicles. We think that the hydrogen—when we think of the hydrogen infrastructure, we think of

appliances, not just pipeline.

We are focusing on small demonstration projects for the next 3

to 5 years. And in the 5- to 10-year timeframe, we see industry cooperating with government on larger scale, rail commercial projects

as opposed to demonstrations, that will lead the legacy of an infrastructure.

In closing, hydrogen and fuel cell based transportation is the future. The pace of technical progress is accelerating. The U.S. cannot be left behind or sitting on the sidelines. It is clear that we

have intense global competition for leadership in this race to establish and commercial hydrogen and fuel cell technologies, and we

think now is the time for the government, U.S. industry, U.S. universities, to create the partnership that will lead the world in the

change.

General Motors and our partners are driving to bring first generation fuel cell technology to market as quickly as possible.

I thank you, and I look forward to responding to your questions.

I might also add that a more expansive view of what I have just

talked about was published in Scientific American October 2002.

And if you would like, we could enter it into the record.

[The prepared statement of J. Byron McCormick follows:]

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PREPARED STATEMENT OF J. BYRON MCCORMICK, EXECUTIVE DIRECTOR, FUEL CELL

ACTIVITIES, GENERAL MOTORS CORPORATION

Mr. Chairman and Members of the Committee. Thank you for the opportunity to

be here today to testify on behalf of General Motors. I am Byron McCormick, Executive Director of GM’s Global Fuel Cell Activities, and I head the team that is developing our hydrogen-powered fuel cell vehicles.

THE PROMISE OF HYDROGEN FUEL CELLS

Fuel cells and hydrogen are core to GM’s advanced propulsion strategy. We are

committed to improving the fuel economy and emissions performance of our vehicles

by executing a comprehensive three-phase technology plan that includes advanced

internal combustion engines and new transmissions in the near term, followed by

hybrid vehicles... but our ultimate vision is to establish leadership in hydrogen fuel

cells.

Today, I would like to tell you why General Motors believes hydrogen fuel cell vehicles are so important.

• Fuel cell vehicles running on hydrogen fuel are the ultimate environmentally

friendly vehicles because their only emission is water. The fuel cell supplies

electricity to an electric motor that powers the wheels. The fuel cell produces

electricity by stripping electrons from hydrogen that travels through a membrane to combine with oxygen to form water.

• Fuel cell vehicles are on the order of twice as energy efficient as the internal combustion engine, have no pollutant emissions, and are quiet.

• Fuel cell vehicles enable energy feedstock diversity, which will increase energy

independence and introduce competition into energy pricing—potentially bringing down fuel and energy costs in the long term and making prices more stable.

• Hydrogen fuel cells can substantially reduce greenhouse gas emissions. When we

look at fuel cell vehicles on a ‘‘well-to-wheel’’ basis, they demonstrate outstanding potential to reduce or eliminate well-to-wheel greenhouse gas emissions and improve overall energy efficiency, even taking into consideration how

we make hydrogen today. In the future, we can do even better, producing hydrogen using methods that are renewable and have no adverse environmental impact.

• Fuel cells also enable innovative vehicle designs that show promise of being more

compelling, affordable, and sustainable than today’s vehicles. Today, there are

over six billion people in the world. By the end of this century, that number

will approach 10 billion. Most of these people will reside in emerging economies

where the demand for personal transportation is expected to escalate rapidly.

Since only 12 percent of the world’s population currently own automobiles, if we

are to fulfill the aspirations of the remaining 88 percent for the personal freedom that the automobile provides, we must find the means to make our vehicles

sustainable, more functional, and more affordable.

• Finally, fuel cells are a potential source not only of transportation power, but also

of electrical power. The development of this technology will create new, more

environmentally compatible distributed electric power-generation possibilities.

The automobile could provide electrical power to homes and worksites. Power

on today’s electrical grid could be supplemented by the generating capacity of

cars in every driveway. For example, if only one out of every 25 cars in California today was a fuel cell vehicle, their generating capacity would exceed that

of the utility grid. A typical midsize fuel cell vehicle would produce 50 to 75

kilowatts of electrical power, where a typical household may use 7 to 10 kilowatts at peak load.

GENERAL MOTORS’ FUEL CELL DEVELOPMENT PROGRAM

Recognizing the potential of fuel cell technology, approximately six years ago General Motor consolidated and accelerated its fuel cell activities. The GM fuel cell team

was given an important directive by management: Take the automobile out of the

environmental debate. Regardless of whether the environmental debate is focused

on air quality, climate, or overall sustainability, GM leadership recognized that global conditions must inspire bold, thoughtful actions. Our commitment to fuel cells is

clear in the significance of our investment—we have spent more than a billion dollars to date, and growing.

This investment in our fuel cell program has yielded outstanding results:

• In the last four years, we have decreased the size and weight of our fuel cell stack

for a given power by a factor of ten.

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• With each new generation of technology, we have also reduced the cost and complexity of our stack.

• We also are now able to start fuel cells from freezing—minus-40° Celsius (minus40° Fahrenheit)—in substantially less than a minute.

• We have developed a series of hydrogen fuel cell vehicles, which demonstrate how

fuel cell propulsion can be optimized for the existing automobile. Our

HydroGen1 prototype holds 15 fuel cell vehicle performance records and has

been demonstrated around the world. HydroGen3 is our first fuel cell vehicle

able to dispense with a buffer battery, needed in previous generations to meet

performance peaks. With an improved electric drive and optimized fuel cell system architecture, HydroGen3 has outstanding acceleration and is capable of

easily cruising at 100 miles per hour.

• We also have created the AUTOnomy fuel cell concept and a drivable prototype

called Hy-wire. These vehicles combine fuel cells with by-wire electronics and

other advanced technologies in a revolutionary design that ‘‘reinvents’’ the automobile. These designs could make vehicles both more affordable and more compelling for our customers because they enable substantially enhanced

functionality with fewer vehicle components, a longer-life chassis, and a smaller

number of vehicle architectures—all of which have the potential to reduce manufacturing costs.

• We also are testing our fuel cell vehicles in the real world. Over the next few

years, we will be fielding several small demonstration fleets. GM and Shell Oil

recently began a joint demonstration program here in Washington, D.C. to test

fuel cell vehicles and hydrogen fueling technology. The two-year program, which

began earlier this month, will give government officials—like you and your

staffs—the chance to experience firsthand what driving a fuel cell vehicle is

like. Next month, in partnership with FedEx, we will begin our first commercial

trial of a fuel cell vehicle. This program, which will take place in Japan, will

run for one year. Our HydroGen3 vehicle is being used in both demonstration

programs.

These milestones represent remarkable progress. In fact, we believe our rate of

progress will allow us to market stationary fuel cell units by mid-decade and to introduce hydrogen fuel cell vehicles by 2010. But even as we are encouraged by our

progress to date, it is crucial to recognize that the race for fuel cell development is

a marathon, not a sprint. No one should overlook that major economic and technical

obstacles must be conquered before these vehicles can be brought to market and can

become commercially successful.

FUEL CELL COMMERCIALIZATION CHALLENGES

Hydrogen storage, cost, and fuel infrastructure are the major barriers to commercialization.

Hydrogen Storage: With respect to the vehicle, hydrogen storage is the toughest

hurdle. GM has demonstrated both cryogenic liquid and compressed hydrogen storage tanks in our prototype vehicles. While these methods will suffice for early market introduction, over the long term, we should seek ‘‘solid’’ storage techniques such

as chemical or metal hydrides, which will more efficiently and cost-effectively store

significant amounts of hydrogen on board the vehicle.

Cost: The key economic challenge over the coming years is to reduce cost. Our goal

is to attain a cost target of $50 per kilowatt for our fuel cell propulsion system (from

stored hydrogen to torque at the wheels) by 2010. This equates to the cost of a conventional internal combustion engine. To this end, we have achieved a cost improvement with each new generation of fuel cell stack technology, and we have a good

understanding of the additional progress we must make in reducing the cost of each

subsystem to achieve total system affordability.

As we reduce cost to get to automobile-scale applications, many attractive business applications for stationary fuel cells are developing. In fact, we see distributed

generation as a key steppingstone to the introduction of fuel cell vehicles. Working

with our strategic partners, we have developed several fuel cell power generators

using the same fuel cell stack technology as we are developing for our fuel cell vehicles. Earlier this month, here in Washington, we announced an agreement by Dow

Chemical to purchase 35 megawatts of fuel cell power from GM. This is the largest

contract to date in the fuel cell industry. Under the seven-year agreement, 500 GM

fuel cell units will convert co-product hydrogen from Dow’s chemical manufacturing

processes into electricity and heat for its facility in Freeport, Texas. Dow is also considering using fuel cell power at several of its other plants worldwide.

We also recently announced that we will conduct a demonstration of a 75-kilowatt

direct-hydrogen unit in both the U.S. and Japan. We expect to be able to market

45

these units in the 2005 timeframe. Early units are intended to provide backup electricity for uninterruptible power supply systems, such as hospitals and high-reliability data communications networks, and to handle peak power demands. Realtime power markets and common interconnection standards for small-scale fuel cell

power units could be a key enabler to the early roll out of stationary applications

of our fuel cell technology and, by extension, the early rollout of fuel cell vehicles.

It should be emphasized that every hydrogen-fuel cell distributed electric generator

is a potential vehicle filling station, since the hydrogen is by definition available at

that location—which means that distributed electric generation is a critical steppingstone to the hydrogen refueling infrastructure.

Fueling Infrastructure: The third challenge we have to overcome is developing

business models for the deployment of a hydrogen infrastructure and piloting technologies to support it.

One of the more exciting aspects of hydrogen is that there are many scenarios for

producing and delivering it. Hydrogen could be generated at local filling stations

from gasoline or natural gas, using an appliance-like devise called a ‘‘reformer.’’ Hydrogen also offers the potential for refueling at home using an electrolyzer or natural gas reformer. This takes advantage of the fact that water, electricity, and natural gas are already available in our homes and businesses.

Initially, hydrogen will likely be produced from many sources. Steam reforming

of natural gas will probably be the first source because industry already uses this

technique to produce large amounts of hydrogen—nine million tons per year. This

process does produce carbon dioxide—about half as much as gasoline on a well-towheel basis. The cost of natural gas would presumably go up due to limited supply.

However, it is doubtful that hydrogen demand will increase so rapidly as to adversely affect the supply of natural gas. There should be sufficient supplies to

produce hydrogen for the early years of fuel cell introduction. We estimate that if

we had one million fuel cell cars on the road and all of the hydrogen for those cars

came from reformed natural gas, it would increase the current demand for hydrogen

by 0.2 percent. If you had ten million fuel cell vehicles, it would increase current

demand by 2 percent.

Petroleum companies have said that hydrogen can be generated from natural gas

today at approximately the same cost as conventional fuel. A key issue will be implementation of an efficient new hydrogen distribution system. Implementation

would include ‘‘on site’’ creation of hydrogen from various feedstocks via electrolysis

and reformer technologies. Again, a key ingredient will be nationally uniform codes

and standards to ensure rapid implementation.

CALL TO ACTION

GM has always believed that it will take a three-way partnership involving the

auto industry, energy companies, and government to successfully commercialize hydrogen fuel cells for vehicles and stationary applications. There are a number of

areas where government could have an immediate impact:

We would welcome a major new national R&D initiative on hydrogen storage and

production that would leverage the creative capabilities of our government labs, universities, and industrial research facilities.

We would also like to see a similar aggressive R&D program focused on breakthrough fuel cell materials.

We believe the Department of Transportation should ‘‘undeclare’’ hydrogen as a

hazardous material and treat it as a fuel.

And since federal and state agencies will have a role in the transition to the hydrogen economy and they should begin that process today by evaluating the use and

impact of hydrogen and fuel cell technologies in their operations.

Finally, the government should take the lead on development of a national template for the codes and standards that will be required for hydrogen, fuel cells, and

distributed electric generation.

SUMMARY

To summarize GM’s position on the emerging hydrogen economy:

1. We see fuel cells as the long-term power source. GM’s global fuel cell program seeks to create affordable, full-performance, exciting fuel cell vehicles that

meet or exceed customer expectations and emit only water vapor from their tailpipes. We believe that customers will want to buy these vehicles.

2. We see hydrogen as the long-term fuel.

3. With continued progress on technology, we think fuel cell vehicles could

be cost competitive by the beginning of the next decade.

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4. We think stationary fuel cells will pave the way for fuel cell vehicles. By

taking our vehicle fuel cell technology to the stationary power market, we are

learning how to improve fuel cell reliability and durability, move further down

the cost curve, build the required manufacturing and supply base, and accelerate infrastructure development.

5. When we think of hydrogen infrastructure, we think of appliances not

just pipelines. Traditional infrastructure such as pipelines and centralized

plants is not the only means to provide hydrogen for fuel cell vehicles, although

it will be part of the solution. If hydrogen is made from natural gas at fueling

stations or homes, it will not be necessary to transport hydrogen. We will need

cost-effective and efficient reformer appliances. Similarly, if hydrogen is made

via electrolysis, we will need practical and affordable electrolyzer appliances.

This is an area ripe for entrepreneurial exploration and rapid implementation.

For this reason, we are stressing the need for governmental action on nationally

uniform standards for distributed electric generation, hydrogen storage, and

safety codes.

6. We are focusing on small demonstration projects for the next 3-5 years,

to gain engineering knowledge that we will apply to technology development

still needed for the vehicle and to increase our cycles of learning with respect

to infrastructure requirements and the codes and standards that need to be addressed to enable the use of hydrogen as our future automotive fuel. I would

just caution that demonstration projects are costly and require many of the

same resources we are using to refine fuel cell technology, particularly on the

vehicle side. In the next couple of years, the goal should be to have a limited

number of small-scale—but integrated—demonstration projects and then expand those projects later in this decade.

7. In the 5-10 year timeframe, we see industry cooperating with government

on larger-scale, real commercial projects that leave a legacy of infrastructure.

In closing, I believe hydrogen and fuel cell-based transportation are the future.

The pace of technical progress is accelerating. The U.S. cannot be left behind or sitting on the sidelines. It is clear that we are in an intense global competition for

leadership in this race to establish and commercialize fuel cell technologies. In

Japan, the kyogikai (which are companies operating under government auspices)

are developing a program for the implementation of fuel cell technology. Now is the

time for the U.S. government, U.S. industry, and U.S. universities to create a partnership that can lead the world in the charge to achieve this vision.

General Motors and our partners are driving to bring first-generation fuel cell

technology to market as rapidly as possible.

Thank you.

I look forward to responding to your questions.

Mr. BARTON. Thank you, sir. We are going to give you the Ed

Markey Award. It took you 11 minutes and 16 seconds. Somebody

once said what is good for General Motors is good for the country.

So we are going to give the rest of the panelists the same amount

of time if they wish. Hopefully, they will give a little of that back.

So we will see if the rest of them can summarize their testimony

in less than 11 minutes. And let us start as a goal around 5 minutes. But, again, we want to hear what you folks have to say, so—

and General Motors has set the standard.

And if Congressman Markey were here, he would be very proud

of you. You have doubled the time that we allotted.

So, Ms. Rips, we welcome you, and we hope that you can summarize your testimony in 5 or 6 minutes. But, again, we want to hear

what you have to say.

STATEMENT OF CATHERINE RIPS

Ms. RIPS. Thank you. If I could have 6, I will be happy.

Mr. BARTON. You have 6.

Ms. RIPS. Okay. Well, thank you very much for that. I greatly appreciate the opportunity to appear before you today. The use of hyVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6602 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
47

drogen in transportation applications is a subject near and dear to

my heart. It is something that we live and breathe on a daily basis.

I represent SunLine Transit Agency, the only public transit agency in the country to generate hydrogen onsite and use it in both

fuel cell and hythane buses. Hythane, in case you are not familiar

with the term, is an ultra-clean blend of hydrogen and natural gas

that can be used in natural gas engines that are commercial available today.

For the past 3 years, we have tested natural gas reformers, operated electrolyzers off of grid and renewable solar power, demonstrated storage and dispensing systems. We have also actively

participated in the California fuel cell partnership, since its inception in 1999.

Ours is a relatively small transit property located in Coachella

Valley or the Palm Springs area. You may know it as the ‘‘Playground of Presidents’’ or the ‘‘Golf Capital of the World.’’ Those tag

lines have a great deal to do with why we became clean air champions.

Eleven years ago, our board of directors—all elected officials—

passed a resolution mandating our wholesale conversion to alternate fuels. Their decision was motivated by a commitment to clean

air, public health, and a desire to reduce oil imports. Since 1994,

we have operated our public transit, paratransit, and regional

streetsweeping fleets 100 percent on clean fuels. We currently operate over 150 vehicles on natural gas, hydrogen, and hythane.

We established the Nation’s first clean fuels mall, where all of

our fuels are available to the public 24 hours a day. We also established the SunLine Beta Test Center for Advanced Energy Technologies, where in partnership with industry, government, and academia, we test and demonstrate prototype vehicles, distributed

generation, and infrastructure technologies to help advance their

commercialization.

We have well over 25 million miles of experience on alternate

fuels, mostly on natural gas. We have created what we consider a

highly replicable model where public transit becomes a regional

clean air catalyst.

By launching a public-private partnership with Entergy, a builder and operator of natural gas stations, we were able to build seven

public-access natural gas stations. Then, having made fuel available in our area, we took the lead in the DOE’s Clean Cities Program and helped local fleet operators take advantage of incentives.

As a result, over 1,000 alternate fuel vehicles now use the CNG

stations we developed. We have every reason to believe the same

model will work with the transition to hydrogen.

Our approach since day one has been to remove barriers. We

stress training, public education, and a top-down commitment. Because of our expertise, we have hosted visitors from 30 countries,

including foreign energy ministers and Ambassadors and dozens of

transit properties worldwide.

And while, fortunately, we have experienced no significant problems of our own, we truly believe most can be avoided through

proper training.

We wholeheartedly support the President’s commitment to hydrogen. However, we respectfully request your help with a few

48

problematic issues. First, we see the lion’s share of emphasis being

placed on light-duty vehicles. But based on past experience, we

know it is the heavy-duty sector, and transit in particular, that is

most successfully adapted to advance natural gas and hybrid technologies.

We believe transit is the key place to begin the transition to hydrogen. That said, we know that it will take multiple generations

before a fuel cell engine can withstand the rigors of 19-hour a day

transit service. To achieve commercialization, we need committed,

long-term funding for the continued development of a limited number of multi-year demonstration projects.

Without top-down commitment to what we call the path of continuous improvement, the United States will lose this important industry to an international market that appears more ready to support it. Japan, Europe, Singapore, Korea, China, and others are

currently outspending us by hundreds of millions of dollars.

Second, because fuel cell technology is not ready for immediate

commercialization, we urge you to endorse the Clear Act incentives

for natural gas vehicles and infrastructure, and to extend those

benefits to blends of natural gas and hydrogen. We can’t ignore the

present in favor of an uncertain future.

We also enthusiastically support incentives for fuel efficiency and

the use of other alternate fuels. We believe there are many paths

to reduced consumption of oil, and America needs to ambitiously

pursue them all. This is not the time to limit options. It is the time

to open doors to innovation.

Last, and critical from our standpoint, we urge you to support

early adapters of new advanced vehicle technologies, regardless of

whether they are natural gas hybrid or hydrogen. Those of us who

take the risk and make the investment to purchase cleaner, new

technologies, and improve our energy security and our air quality,

have a way of being left with the most expensive version of the

least-reliable technology. We need ongoing support to upgrade

when improvements become available.

So I would like to leave you with these thoughts. To best support

the President’s plan, we need to build a program under the FTA

with committed funding for fuel cell bus development that runs

concurrent with the DOE and DOD program that recognizes R&D

for light-duty and heavy-duty vehicles and infrastructure.

We need to address and remove barriers to utilizing hydrogen

such as clarifying codes and standards, and we need to improve opportunities for public education, technician training, and technology transfer.

Finally, the private sector has invested billions of dollars in hydrogen vehicle and related technologies. At present time, none of

those efforts have generated a profit. We feel incentives are needed

to motivate consumers to buy the clean vehicles that are already

on the market and encourage infrastructure developers to keep

building stations.

While we have all the faith in the world that our technology

partners will be successful in bringing down costs and improving

reliability, we believe government must ensure its sustained support to encourage the private sector to continue investing.

49

And last, any time you are near Palm Springs please visit us in

Thousand Palms. We will be delighted to give you a tour and show

you how these exciting technologies work in a real environment.

Thank you.

[The prepared statement of Catherine Rips follows:]

PREPARED STATEMENT OF CATHERINE RIPS, SUNLINE TRANSIT AGENCY

To reduce dependency on imported oil and increase national security, America

must reduce demand, increase supply and develop sustainable alternative. SunLine

Transit Agency, Thousand Palms, CA, is committed to advancing the commercialization of clean fuel and clean energy technologies. A valuable national resource,

SunLine is beginning its fourth year of producing hydrogen on site and using it in

prototype vehicles, and in its ninth year of operating transit, paratransit and street

sweeping fleets powered 100% by alternate fuels.

The agency has the most hydrogen experience of any transit property in the country is actively working with fuel cell manufacturers, bus manufacturers, system integrators, energy providers, the Federal Transit Administration, U.S. Department of

Defense, U.S. Department of Energy, State of California, California Fuel Cell Partnerships and others to create and test the next generation of heavy-duty fuel cell

engines and vehicles, hydrogen generation, and distributed generation technologies.

In conjunction with its hydrogen test program and ongoing alternate fuels

projects, the agency established the SunLine Beta Test Center for Advanced Energy

Technologies at its Thousand Palms headquarters. There, hydrogen generated on

site from renewable solar power and reformed from natural gas is used to fuel ultralow and zero-emission vehicles and stationary fuel cells; prototype advanced transportation/clean energy technologies are demonstrated; and compressed natural gas,

liquefied natural gas, Hythane  and hydrogen are available to the public 24 hours

a day.

It’s one of a kind in the world, and as such, has drawn top-level visitors from 30

countries during the past three years. Delegations have included foreign energy

ministers, ambassadors, energy department officials, regulators, automakers, global

energy providers and a dozen TV news crews from the U.S., Japan, Germany and

Italy.

Since 1994, SunLine has logged 25 million clean air miles and displaced more

than 5.5 million gallons of imported fossil fuel. The agency has earned 24 local,

state and national awards for environmental leadership and efforts to advance clean

fuels technology.

Summary of SunLine’s Hydrogen Fleet and Infrastructure Technologies

During the past three years, SunLine has demonstrated and/or performed hot

weather testing on a variety of prototype vehicles including: two Hythane  buses

(with two additional engines now on test stands at Westport); the Ballard

(XCELLSiS) P4 ZEbus; the Ballard P5 Citaro fuel cell bus; the ThunderPower LLC

hybrid fuel cell bus; the Georgetown University methanol fuel cell bus; SunBug, the

country’s first street-legal neighborhood fuel cell vehicle; three hydrogen fuel cell

powered golf carts; a pickup powered by a hydrogen internal combustion engine

(ICE); five California Fuel Cell Partnership vehicles; and a Shelby Cobra race car

with a hydrogen ICE.

At the same time, SunLine demonstrated an HbT/Gaz de France natural gas reformer; a Stuart Energy Systems P3 grid-powered electrolyzer; a Teledyne Energy

Systems Altus solar-powered electrolyzer; compression and storage systems; hydrogen and Hythane  dispensers at 3,600 psi. The agency is currently expanding its

capabilities to add fueling at 5,000 psi, is awaiting delivery of a new Hydradix natural gas reformer utilizing state of the art autothermal recovery technology, and is

a partner in a project to generate hydrogen from wind power. Thanks to the support

of Congressman Jerry Lewis and Congresswoman Mary Bono, SunLine is likewise

under contract by the National Automotive Center to introduce fuel cells to a Class

8 tractor in a phased approach, with the ultimate goal of demonstrating a diesel fuel

reformer/fuel cell/hybrid electric drive train. SunLine partnered with UC-Riverside

and is now working with Southwest Research Institute in Texas on this important

project. The agency is also under contract by South Coast Air Quality Management

District (AQMD) to create station templates for multiple hydrogen infrastructure

technologies, and to outline considerations for building natural gas stations for future compatibility with hydrogen; and to test insulated Type III tanks to store both

compressed gases and associated cyrogenic liquids.

As a result of our experience, we offer the following strategies/suggestions:

50

Heavy-Duty Sector Launches Transportation Transition

While we wholeheartedly endorse the President’s FreedomCar program and Hydrogen Fuel Initiative, we believe the heavy-duty sector is a more likely launch pad

for the transition to hydrogen in transportation applications. Though the sector represents just 6% of the vehicles on the road today, heavy-duty vehicles produce 60%

of the NOX and more than 80% of the harmful PM emissions. By starting the transition in the heavy-duty sector, greater gains can be made with fewer vehicles; heavyduty engines developed for transit applications can then be used in heavy trucks.

Transit Leads Development, Demonstration and Deployment

Public transportation is perfectly positioned to lead the development and testing

of advanced fuels and drive trains, development of public access hydrogen infrastructure, training and public education. Transit has historically adopted advanced

low emission technologies. Over the last decade, for example, the market share for

natural gas transit buses has increased from zero to 25%. Today, over 6,000 natural

gas transit buses and over 500 hybrid electric buses have been deployed or are on

order. No such parallel exists in the light-duty sector. If however, the rest of the

transportation sectors followed transit’s lead, according to information provided by

CalStart/WestStart, one of nine corsortia created by RSPA, dependence on OPEC oil

would be reduced by half.

Transit districts are the ideal proving ground for new fuels as they operate the

buses on fixed routes, utilize centralized refueling facilities, have highly trained mechanics, ongoing safety programs, and a subsidized purchasing system. In addition,

transit buses have fewer packaging and weight constraints than passenger cars, and

as the photo on Page 2 aptly displays, buses serve as mobile billboards to familiarize

huge numbers of people with clean fuels, thus paving the way for acceptance of hydrogen-fueled consumer vehicles.

SunLine’s tagline is ‘‘Today’s Model for Tomorrow’s World.’’ When the agency converted overnight to a fleet powered 100% by natural gas in 1994, it created a model

that can be used by public transit to speed the transition to hydrogen. The agency

worked with a private sector partner, ENRG, a Southern California developer of

natural gas fueling infrastructure, to build seven public access refueling stations

throughout the Coachella Valley. As a result, natural gas fueling is available 24

hours a day, and no fleet operator is more than a 10-12 minute drive from a station.

Having removed the barrier of lack of availability of fuel, SunLine took the lead

in the Coachella Valley’s Department of Energy Clean Cities program, and together

with ENRG, worked to help public and private fleets access available incentive and

grant funds. There are now over 1,000 vehicles utilizing natural gas stations in

SunLine’s service territory.

While we hear repeatedly the dilemma of ‘‘the chicken and the egg’’—that automakers can’t sell cars until stations are built and no private sector business can

build infrastructure for which there is no use—this model, using transit to develop

public access infrastructure—can help solve the stalemate.

Efforts Coordinated at Federal Level

A multi-year program with guaranteed funding coordinated by DOE, FTA and

DOD must be supported from the top down to ensure the speedy commercialization

of heavy-duty fuel cell engines, fuel cell buses and infrastructure technologies. Legislation recently introduced by Congresswoman Mary Bono advances this goal by directing the Department of Energy to provide a minimum of $10 million in funding

for six years to support the consortia-based Advanced Vehicle Program to accelerate

the commercialization of fuel cell bus technology. We strongly support this legislation as well as the National Heavy-Duty Fuel Cell Bus Initiative, which authorizes

guaranteed funding at the level of $25 million per year for fuel cell bus development

and multi-year demonstration projects under the Reauthorization of TEA 21. We do

not advocate creating a new program. Rather, we support modifying the Department

of Transportation’s existing Advanced Vehicle Program to focus exclusively on the

development of fuel cell buses.

Both programs support our belief that field-testing of fuel buses is essential. Both

likewise recognize that because of the current state of technology and expense to

taxpayers, demonstrations need to be limited to a small number of transit properties

that are thoroughly committed to the success of such programs. Rather than deploying large numbers of test buses, these programs support using funds to improve and

demonstrate multiple generations of the technology at designated test sites with a

goal of reaching commercialization at the end of the six-year period.

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Early Adapters Supported

As previously stated, to reach commercialization in the timeliest way, a limited

number of early adapters must be supported through the testing of multiple generations of fuel cells and related technologies. However, most funding mechanisms conflict with this approach. Grantors and appropriators understandably seek to ‘‘spread

funds around.’’ Unfortunately, in this particular situation, that approach does not

best serve the country’s objectives.

What we see in the field and have experienced ourselves is that those who take

the risk and make the investment to purchase cleaner, new technologies that improve our energy security and our air quality are generally left with the most expensive version of the least reliable technology. As, regardless of its benefit to the country, FTA capital and operating funds cannot be used to support research and demonstration of fuel cell technology and infrastructure, early adapters need ongoing

support from some other source to upgrade when improvements become available.

ICE’s Play an Important Role

In the case of heavy-duty transit applications, to reach commercialization, the cost of a fuel cell bus needs to be reduced from over $3 million per bus to $300,000, and

its life expectancy needs to increase from 1-2 years to 12. Clearly, that is not going

to happen overnight. Until such time as fuel cell vehicles are commercially viable

and available, those alternatives that reduce our dependence on OPEC oil and improve air quality and public health should be aggressively pursued and incentivized.

Among them are vehicles with natural gas, blends of hydrogen and natural gas, and

hydrogen internal combustion engines.

We hear but don’t understand arguments against continued support for natural

gas vehicles and infrastructure. Expanding the use of natural gas vehicles is a logical and practical progression toward developing a hydrogen transportation network.

NGV deployment requires commercialization of systems for storing, transporting

and delivering gaseous vs. liquid vehicle fuel. Broader use of natural gas requires

expanded pipeline fuel delivery systems that, when adapted, can supply the hydrogen needed to fuel the first generation of hydrogen-powered consumer vehicles.

In addition, NGV standards serve as a valuable starting point for the development

of comparable codes and standards for hydrogen infrastructure and vehicles, including fuel cell vehicles. There is also widespread agreement that natural gas is the

fossil fuel from which it is easiest and least expensive to extract hydrogen and will

remain so until renewable sources become economical.

There are currently more than 200 natural gas fueling stations in California and

several thousand worldwide. As natural gas infrastructure continues to develop, it

will be a simple matter to add equipment dispensers for blends of hydrogen and natural gas (such as Hythane ). By co-developing natural gas, blended fuel, and hydrogen infrastructure, customers are given a gaseous fueling option to meet any specific

engine and/or duty-cycle requirement.

Natural gas vehicles in the heavy-duty sector are meeting/surpassing the most

stringent emissions standards today. Heavy-duty ICEs burning hydrogen and natural gas blends could have an immediate environmental impact while fostering a

better understanding of natural gas and hydrogen among commercial users.

SunLine has and continues to work with the natural gas vehicle industry to test

engines using fuel with increased hydrogen content by blending compressed natural

gas with variable amounts of hydrogen. Based on emissions tests, even blends with

relatively small amounts of hydrogen (20% by volume) have shown dramatic reductions in engine emissions.

Vehicles with internal combustion engines burning hydrogen-natural gas blends

are practical, achievable and affordable with existing technology. Most important,

they create the only conceivable economic justification for building hydrogen infrastructure in advance of the commercial availability of fuel cell vehicles. This infrastructure growth will catalyze much needed development and refinement of the necessary codes and standards for deploying hydrogen vehicles.

Lessons Learned

Since converting to alternate fuels in 1994, and since the Department of Energy

and other funders helped SunLine open its hydrogen facilities in 2000, the agency

has accomplished a number of goals and learned valuable lessons. Primary among

them are:

• Leadership by elected officials is the most important ingredient. Given clear policy

directives and support, implementation is achievable. But follow-through is essential. EPAct is a case in point where policy goals were exemplary but federal

agencies didn’t follow through. EPAct didn’t fail. Those who served as watchdogs failed.

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• Training is key to success in any alternate fuel program. Before its natural gas

buses arrived, SunLine trained every employee on property to be familiar with

the properties and benefits of the new fuel. To train its mechanics and operators, the agency partnered with College of the Desert, it’s local community college, to create the first training curriculum for alternate fuels technicians. All

mechanics and operators have completed the intensive course and continue to

attend regular training sessions. SunLine repeated the successful model with

hydrogen. The agency contracted the Schatz Energy Research Center at Humboldt State University to teach a workshop on hydrogen to every employee and

board member. Working with private sector and education partners, with funding from FTA, SunLine co-produced the first training manual on Heavy Duty

Fuel Cell Engines and Related Technologies. Posted on the National Renewable

Energy Laboratory’s (NREL) Alternate Fuels Data Center website, within the

first two months of its appearance, the downloadable curriculum logged 132,000

hits—the most ever recorded in that period of time by NREL.

• Public education is a must. To gain buy-in from your community, you must bring

the public along. SunLine conducts outreaches, participates in community

events, offers weekly public tours of its clean fuels facilities, operates a speaker’s bureau, hosts a website with a clean fuels section. The agency also created

an Education Collaborative with private sector partners and South Coast Air

Quality Management District to maximize the educational value of its hydrogen

facilities. Museum-style interpretive signage explains various technologies; collateral brochures further define tour highlights. The interior of the agency’s

Zweig Education Building, used for industry and community events, is wrapped

in an exhibit that invites those viewing it to be part of the national security/

clean air solution.

• Partners are essential. SunLine is a small agency with limited funds and human

resources. We could not have achieved all we have without many talented and

dedicated partners. Nor could we have achieved as much without the steadfast

support of our Congresswoman, Mary Bono, who has championed our clean

fuels efforts since taking office. Many of our important partners are listed

below:

Education Partners

Advanced Transportation Technologies Initiative (ATTI), College of the Desert—

Energy Technology Training Center, Department of Environment /Urban Consortium Energy Task Force, Georgetown University, Humboldt State University—

Schatz Energy Research Center, National Science Foundation, University of California—Riverside, CE-CERT

Government Partners

California Air Resources Board, California Energy Commission, City of Palm

Desert Coachella Valley Association of Governments, Federal Transit Administration, Imperial Irrigation District, Palm Springs International Airport, South Coast

Air Quality Management District, U.S. Department of Defense, U.S. Department of

Energy

Technology Partners

Air Products, Allison Transmission, American Public Transportation Association,

Ballard (formerly XCELLSIS), California Fuel Cell Partnership, California Hydrogen Business Council, California Natural Gas Vehicle Coalition, California Transit

Association, Clean Air Now, Coachella Valley Economic Partnership, Cummins Engine Company, DCH Technology, Detroit Diesel, Dynetek, Engelhard Corp., ENRG,

Federal Mogul, FIBA Technologies, Fueling Technologies, Gaz de France, HbT, Hydrogen Components, Inc., ISE Research, John Deere, National Hydrogen Association, Natural Gas Vehicle Coalition, Orion Industries, Ltd., Quantum Technologies,

QuestAir, Shell Hydrogen, Southern California Gas Co., Southwest Research Institute, Stuart Energy Systems, Teledyne Energy Systems, Thunderpower LLC,

TotalFinaElf, TIAX, UOP, UTC Fuel Cells, Wintec.

Challenges to Fuel Cell Commercialization

Among the impediments to commercialization SunLine has identified are:

• Cost

• Reliability of fuel cells

• Availability/affordability of liability insurance

• The lack of uniform/reasonable codes and standards

• The need for comprehensive public education/outreach programs

• The lack of coordinated programs with sustained funding at the federal level

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• The lack of consistency by the government. (For example, CAFE ́ standards were

passed and rescinded; the Clean Cities Program, though very effective, is in

danger of having its budget slashed. Manufacturers and consumers are confused

by the changes and now wary of committing to any alternate fuel path.)

Prior Questions Posed by Senate Energy Committee Members

Richard Cromwell III, general manager/CEO of SunLine, participated in a hearing

held by the Senate Energy and Natural Resources Committee on April 25, 2003.

Following the hearing, we were asked to respond to a number of questions that are

likely salient. For that reason, we include them here as they were submitted to the

Senate committee.

Q. What are the advantages of using natural gas or another hydrogen carrier fuel

as the feedstock for hydrogen in the short term? How will this increased demand

for natural gas impact natural gas supply and prices?

A. No technology that exists today can compete on a cost basis with reforming hydrogen from natural gas. Proven reforming technology exists, is cost-effective, and

when combined with carbon sequestration, begins to be competitive with electrolysis

from a greenhouse gas perspective. If we define ‘‘short term’’ as present day—2020

to 2030, there would be no negative impact on natural gas supplies. Rather, as demand increased, it would become economic to increase production. Beyond 2020-

2030, it might be necessary to supplement U.S. natural gas supplies with imported

liquefied natural gas (LNG).

All that aside, every possible program should be put in place to make renewables

cost competitive for hydrogen production. SunLine has demonstrated solar electrolysis since 2000. It works. We’re about to demonstrate wind-hydrogen production

as well. But until demand is sufficiently high to lower the cost of production, it will

never be competitive. Another ‘‘chicken and egg’’ scenario. The solar and wind industries need incentives and large orders to increase production.

Q. Is it more likely that we will have hydrogen fueling stations, or we will see

hydrogen generated in our garages from distribute energy resources?

A. Based on what we’re hearing today, it is unlikely home electrolysis units would

be cost competitive. However, a home reformer may be feasible. If manufacturers

solve the technology issues that currently exist and home reformers become available, there could be a mix of home fueling and stations, but the primary method

of delivery will likely be fueling stations.

Q. Should the EPAct alternative fuel vehicle mandate program be continued? If

so, how should it be fixed? Should we offer credits toward compliance for investments in fueling stations or use of fuel?

A. Yes, the EPAct mandate program should be continued. It could be improved

as follows: Include a study provision intended to promote trading of emissions credits between mobile and stationary sources; provide double EPAct credits for fleets

acquiring dedicated heavy-duty alternative fueled vehicles; provide credits for companies that make a significant contribution to the development of alternative fuel

infrastructure; and require the GSA to allocate the incremental cost of an alternative fuel vehicle over the entire federal fleet. Currently, GSA charges an agency

the entire incremental cost of an NGV.

Substitute language, endorsed by our partners in the Natural Gas Vehicle Coalition, follows:

‘‘Sec. 13265. The Secretary shall establish an optional program under which fleets

subject to the requirements of sections 13251 or 13257(o) of this subchapter may opt

out of the requirements of those sections by making a demonstration to the satisfaction of the Secretary that the fleet or covered person is in good standing with the

regulations issued pursuant to sections 13251 or 13257(o) and that the fleet will

achieve reductions in the use of petroleum fuels if it is permitted to opt-out of the

requirements of these sections. The program established by the Secretary shall by

rule:

(a) Establish a measurable annual petroleum reduction requirement for a covered

fleet equal to the amount of alternative fuel the fleet would use if at least 60

percent of the annual amount of fuel used in all light duty motor vehicles owned

or otherwise controlled by the fleet was alternative fuel.

(b) Allow a fleet that opts into the program to achieve petroleum reduction in any

manner it chooses, except that reductions in the size of the fleet shall not be

considered in determining the total amount of petroleum reduction by the fleet.’’

Q. If we are moving to a fuel-cell based transport fleet, should we still be interested in ethanol, biodiesel, natural gas, etc., or should we just use them to make

hydrogen?

A. We should absolutely still be interested in and provide incentives for purchase

of alternative fueled vehicles (AFVs) powered by ethanol, biodiesel, natural gas, and

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hydrogen-natural gas blends, as well as for hybrid vehicles that dramatically increase fuel efficiency. As, if not more important, we should provide incentives for

purchase of alternative fuels at the pump. AFVs can’t reduce foreign oil and lower

emissions unless they alternate fuels are consumed.

Unlike SunLine, which parked a fleet of diesel buses and went into service overnight with a new fleet powered by natural gas, as a country, we will never see a

wholesale conversion at any point in time to a new fuel (hydrogen or otherwise).

What we’ve seen repeatedly this past 10 years is that different clean fuels fit different circumstances and what works in one location/situation may not in another.

Options should never be limited. Our goals (displacing imported petroleum and improving air quality) should be fuel neutral. What should be mandated or regulated

is the outcome—not the fuel type.

Q. Aside from new R&D funding, what can/should Congress do to hasten development of hydrogen-fueled vehicles?

A. Revise DOE’s timetable from 2020 back to 2010-2015; increase the purchase

and use of hydrogen vehicles by federal fleets; pass sustained, guaranteed funding

for research, development and demonstration of heavy duty fuel cell transit buses;

offer incentives for infrastructure development.

Q. Which policy actions are more important for deployment of advanced technology vehicles—R&D, tax incentives, demonstration projects or regulations?

A. No one action can be singled out. A coherent program is needed that addresses

all of the above. Transitioning to a hydrogen economy has been likened to putting

a man on the moon. Many in the industry think it will be more difficult! We have

to do everything possible as a concerted, coordinated effort to move the technology

forward.

Q. Give the focus on hydrogen as the transportation fuel of the future, how much

effort should we expend on using other alternative fuels? For example, should we

use natural gas directly for transport or convert it to hydrogen first?

A. We will never see a wholesale conversion at any point in time to a new fuel

(hydrogen or otherwise). Use of all alternative fuels should be encouraged/rewarded.

Every gallon we use (or gas gallon equivalent) reduces our dependency on imported

oil, reduces airborne pollutants and reduces greenhouse gases.

Q. Where is the U.S. compared to Europe and Japan in terms of competitiveness

for the emerging hydrogen market? Will this new initiative push the U.S. ahead of

its competition?

A. While this question was likely directed toward the passenger car market, my

answer addresses the heavy-duty transit bus market. There are currently seven fuel

cell transit buses on order in the U.S. compared to 30 buses that will be delivered

to 9 European cities and Australia through the EU’s multi-national CUTE program.

Japan, Singapore, and a group of undeveloped nations working with the World Bank

and UNDP likewise have programs underway. Despite the fact that transit buses

are the most visible vehicles on the road, and that public transit is the ideal launch

pad for a fuel cell program (because of centralized fueling, bus size/shape, and having trained mechanics and operators), the U.S. has no committed, sustained funding

for the ongoing development/refinement of heavy-duty fuel cell buses. Through our

experience, we’ve learned it will take several generations of engines before a fuel

cell can withstand the rigors of the public transit environment. Without a multiyear commitment to technology development and demonstration, the U.S. will absolutely not be competitive with Europe or Japan in this market.

Q. What kind of coordination is occurring between the Department of Transportation and Department of Energy regarding the demonstration fleet vehicles including transit buses?

A. From our standpoint, in the past, there has been little coordination between

the two departments. We recently attended an industry meeting where a DOT rep

stated his department’s role began at the point where new technologies were ready

for deployment. DOE, however, does not fund heavy-duty transit bus R&D—which

leaves transit operators in a crack in the system. We need a coordinated program

for research, development and demonstration of multiple generations of fuel cell

buses and corresponding funding for continuing hydrogen infrastructure upgrades in

order to have a success. We have the same problems with early generations of hydrogen generating, storage and dispensing technologies as we do with early generations of fuel cell bus engines. The early generations can’t withstand the daily rigors

of the transit environment over a multi-year period. We need continued funding for

early adapters to upgrade to each next generation to improve reliability, efficiency,

and cost.

Q. What makes us think the Hydrogen Fuel Initiative will be any more successful

than programs in the past to deploy alternate fuels and displace petroleum?

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A. The U.S. government has the opportunity to correct all prior mistakes in regard to transitioning to a new, cleaner fuel. For the first time, efforts could truly

be coordinated between the Departments of Defense, Energy, and Transportation so

each has a pre-planned role in reaching the same end point. In addition, the government can look to successful models between government, industry, energy providers,

OEMs, and transit agencies such as the California Fuel Cell Partnership to learn

how to leverage the efforts of multiple stakeholders. One final thought is that the

RFP process and the earmark process don’t particularly support the advancement

and deployment of emerging technologies. The Consortia-based Advanced Vehicle

Program was far more successful in bringing new technologies to the marketplace

than other government programs.

Earmarks tend to fragment funds and no coordination between projects is required. RFPs are very specific and exclude many very viable and necessary projects

(and in some cases, manufacturers) because of technicalities that often contribute

little to the outcome. A better system is to establish a pool for projects of a certain

type and rank them on what they add to the country’s objectives, which is how the

Consortia-based program brought hybrid technologies to the marketplace. While

every consideration should of course be given to U.S. technologies, it is self-defeating

to exclude or penalize foreign automakers, bus makers, and/or manufacturers whose

products perform better than similar American products. The goals are to reduce

foreign oil imports and improve air quality—not subsidize American industry.

Legislators at SunLine

Among our many recent visitors were Senator Barbara Boxer, who presented

SunLine with a Conservation Champion Award in February 2002, Congresswoman

Mary Bono, who attended the October 2002 launch of the ThunderPower hybrid fuel

cell bus into revenue service (and actually drove the bus!), and Senator Byron Dorgan, who attended a hydrogen briefing conducted by CalStart/WestStart and

SunLine March 2003.

We extend the same invitation to all House Energy and Commerce Committee

members to visit ‘‘Today’s Model for Tomorrow’s World’’—SunLine Clean Fuels Mall.

Mr. BARTON. Thank you.

Mr. Preli, you are recognized for 5 minutes plus.

STATEMENT OF FRANCIS R. PRELI, JR.

Mr. PRELI. Thank you, and good morning. My name is Frank

Preli. I am Vice President of Engineering for UTC Fuel Cells, a

business of UTC Power, which is a unit of United Technologies

Corporation.

I appreciate the opportunity to participate in today’s hearing.

UTC Fuel Cells is one of the largest and most experienced fuel cell

companies in the U.S. and the world. We are the only company addressing space, stationary, and transportation markets. UTC Fuel

Cells employs a total of 850 individuals with a team of 350 engineers and scientists focused solely on fuel cell research and technology development. Over the years, our employees have amassed

more than 550 U.S. patents relating to fuel cell technology.

UTC Fuel Cells produced its first fuel cell in 1961 for space application, and then we have supplied all of the fuel cells for the

U.S. manned space missions. UTC Fuel Cells has also led the way

with terrestrial fuel cell applications. We have sold 255 stationary

200-kilowatt size units, known as the PC25, to customers in 25

States, 19 countries, 5 continents. This also includes the powerplant that Congressman Wynn referred to, the police station in

New York City.

Our installed base of PC25’s has generated over 6 million hours

of clean energy. We are also a leader in the development of fuel cell

systems for the transportation market. We count Nissan, Hyundai,

and BMW among our transportation fuel cell partners. In addition,

California’s only hydrogen fuel cell transit bus and revenue service,

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operated by SunLine Transit, is powered by one of our powerplants.

Great progress has been made in fuel cell technology. For example, in the past 5 years, the life of the PEM-type fuel cell stacks

has been extended from 100 hours to 1,000 hours, and recent laboratory testing has demonstrated lives of 10,000 hours. Costs have

also come down dramatically, albeit from a very lofty starting point

of $600,000 per kilowatt for space applications to $4,500 per kilowatt for our current stationary products introduced in 1992.

Our next generation stationary product is targeted at an initial cost of around $2,000 per kilowatt, and we have also achieved 50

percent reductions in size since 1997, and the weight has decreased

by approximately the same amount. But we still have a very long

way to go.

The automotive application is the most challenging based on cost,

durability, and performance requirements. The internal combustion

has a 100-year head start and benefits from the huge volumes produced today. Therefore, it will take longer for fuel cells to successfully compete in this market, but the auto market also offers the

largest payoff in terms of environmental benefits and our ability to

reduce the Nation’s dependence on foreign oil.

We believe fuel cells will be deployed first in stationary devices,

and then fleet vehicles such as transit buses, and only later in the

personal auto market. Transit buses are a strategic enabler on the

path to autos powered by fuel cells. Hydrogen fueling stations can

be made available, given the relatively small number of inner city

bus stations, and the powerplant size and weight requirements are

less demanding than those associated with automobiles.

We need to walk before we run and gain experience in real-world

operating conditions. Fleet vehicles represent a perfect candidate

for this type of practical experience. As the industry gains experience in deploying fuel cells for stationary, inner city buses, and

fleet applications, these successes can pave the way for zero emission fuel cell cars and serve as benchmarks to measure progress.

A team effort that involves original equipment manufacturers,

powerplant component and raw material suppliers, energy companies, and governments, will be required, with substantial, sustained global investment by public and private partners.

Our recipe for successful fuel cell commercialization is included

in my written statement, but the top ingredients here are: 1) development of a comprehensive long-term national strategy with sustained national commitment and leadership; 2) robust investment

by the private and public sector focused on research, development,

and demonstration programs for both fuel cells and hydrogen infrastructure, with an emphasis on renewable sources of hydrogen; 3)

financial incentives and government purchases; 4) elimination of

regulatory barriers; and 5) harmonized codes and standards that

permit global involvement with open access to markets.

We have covered a lot of distance in the past few years, but we

engaged in a marathon, not a 100-yard dash. If the technical challenges are met, the private and public sector make robust investments, suppliers perform as predicted, customer acceptance is won,

and the necessary infrastructure develops as required, we anticipate the earlier adopter vehicle fleets will result in significant fuel

57

cell cars, trucks, and buses on the road by 2010, and a substantial

amount of stationary fuel cell generation capacity deployed. Mass

production of fuel cell vehicles could then begin starting in the

2012/2015 timeframe.

UTC Fuel Cells believes that in order to meet the automotive

challenge a national strategy for fuel cell commercialization must

focus on stationary and fleet vehicles to ensure our success in the

automotive market and get us there sooner. At UTC Fuel Cells, we

are proud of our past accomplishments and excited about meeting

the challenges and opportunities that lie ahead, so that many benefits of fuel cells can be enjoyed not just by the lucky few but on

a global scale.

We look forward to working with you, Mr. Chairman, and other

Members of Congress to ensure the fuel cell agenda noted above becomes a reality, and the fuel cell promise of fuel cell technology is

realized.

Thank you.

[The prepared statement of Francis R. Preli, Jr. follows:]

PREPARED STATEMENT OF FRANCIS R. PRELI, JR., VICE PRESIDENT ENGINEERING,

UTC FUEL CELLS

Good morning, Mr. Chairman. My name is Frank Preli. I am Vice President of

Engineering for UTC Fuel Cells (UTCFC), a business of UTC Power, which is a unit

of United Technologies Corporation (UTC). UTC is based in Hartford, Connecticut,

and provides a broad range of high technology products and support services to the

building systems and aerospace industries. UTC Power is focused on the growing

market for distributed energy generation to provide clean, efficient and reliable

power. One of UTC Power’s businesses is UTC Fuel Cells, a world leader in the production of fuel cells for commercial, space and transportation applications. I appreciate the opportunity to participate in today’s hearing on ‘‘The Hydrogen Energy

Economy’’.

UTC Fuel Cells is one of the largest and most experienced fuel cell companies in

the US and the world. We’re the only company addressing the space, stationary and

transportation markets. UTC Fuel Cells employs a total of 850 individuals and I

lead a team of 350 engineers and scientists focused solely on fuel cell research and

technology development. Over the years our employees have amassed an impressive

list of more than 550 US patents related to fuel cell technology.

UTC Fuel Cells produced its first fuel cell in 1961 for the space application and

since then we’ve supplied all the fuel cells for every US manned space mission. UTC

Fuel Cells has also led the way with terrestrial fuel cell applications. We’ve sold 255

stationary 200-kilowatt size units known as the PC25( to customers in 25 states and

19 countries on five continents. Our installed base of PC25s has generated six million hours of clean energy.

We’re also a leader in the development of fuel cell systems for the transportation

market. We count Nissan, Hyundai and BMW among our transportation fuel cell

partners. In addition, California’s only hydrogen fuel cell transit bus in revenue

service today is operated by SunLine Transit and is powered by one of our power

plants.

In 1839 Sir William Grove discovered that combining hydrogen and oxygen in the

presence of a catalyst could generate electricity. For many years the potential of fuel

cells was untapped. Its use in the space program to generate electricity and provide

drinking water for the astronauts represented its first practical application.

More recent technical advances plus the growing appreciation of the benefits of

fuel cells including their clean, efficient, quiet operation and ability to reduce our

dependence on foreign oil have captured the interest of not just the President of the

United States, but also auto manufacturers, Fortune 500 companies, small business

entrepreneurs, Wall Street, Congress, foreign governments and the general public.

The automotive application is the most daunting challenge and therefore it will

take longer for fuel cells to successfully compete in this market. It’s the most demanding in terms of cost, durability and performance. On the other hand, the auto

market offers the largest payoff in terms of reducing toxic air emissions and greenhouse gas emissions related to global warming, achieving oil import independence

58

and providing incentives for supplier investment due to the huge volume of cars produced each year.

The vision of an economy fueled by hydrogen generated from renewable energy

sources is a revolutionary concept that will require evolutionary, incremental

progress. We believe fuel cells will be deployed first in stationary devices and fleet

vehicles such as transit buses and only later in the personal auto market. Transit

buses are a strategic enabler on the pathway to autos powered by fuel cells. Hydrogen-fueling stations can be made available more readily given the relatively small

number of inner city bus stations and the power plant size and weight requirements

are less demanding than those associated with autos.

We need to walk before we run and gain experience in real world operating conditions. Fleet vehicles represent a perfect candidate for this type of practical experience since they offer an opportunity to enhance the range of operation for the vehicle, gain experience with heavy-duty cycles and train a core group of technicians.

As the industry gains experience in deploying fuel cells for stationary, inner city

buses and fleet applications, these successes can pave the way for zero emission fuel

cell cars and serve as benchmarks to measure progress towards the goals of the Administration’s FreedomCAR and Fuel initiative. Similarly, we believe it is wise to

continue the investments being made in electric drive train technology for hybrid

cars and buses since fuel cell vehicles will incorporate this same technology and benefit from the technical advances and experience gained from these earlier vehicles.

Fuel cells must meet certain technical and performance criteria if they are going

to be commercially viable and accepted in the marketplace. These metrics vary depending on the application, but automobiles represent the most daunting challenge.

We believe consumers will demand that fuel cell power plants deliver cost, durability and performance equivalent to the internal combustion engine.

From a technical perspective, we’ve made tremendous strides in reducing the cost,

size, and weight of fuel cells while increasing efficiency, and substantially improving

durability. But we still have a long way to go.

For example, in the past five years we’ve seen extraordinary improvements in the

life of the fuel cell stack, which is where the electricity is produced and represents

the heart of the power plant. In 1998, proton exchange membrane (PEM) fuel cell

stacks had a life of 100 hours. By 2001, our fuel cell stacks experienced a tenfold

improvement to 1,000 hours and just recently UTC Fuel Cells demonstrated close

to 10,000 hours of durability in laboratory tests.

Perhaps the most remarkable aspect of this significant progress is that it’s been

accomplished not in decades, but in a matter of years. Building on fuel cell experience from the 1960s, 70s and 80s, the use of sophisticated computer simulations,

custom designed testing equipment and the extraordinary talent of dedicated and

experienced engineers has made this possible. We’re very optimistic that with continued investment in public private partnerships and focused demonstration programs to verify and validate our laboratory findings, we’ll meet our durability target

by 2010.

Fuel cell costs have also seen a dramatic decline. Fuel cells used in the space application cost $600,000 per kW; our 200 kW PC25 stationary unit introduced in 1992

costs $4,500 per kW; and our next generation stationary product that will be introduced next year is targeted at an initial cost of around $2,000 per kW. We’ve

achieved similar dramatic reductions in size and weight that also have contributed

to the reduction in costs. For example, fuel cell stack size has been reduced by 50

percent since 1997 and weight has decreased by approximately the same.

So while we’ve made substantial progress, we still have some challenges ahead

if we are going to be competitive with the one hundred year old internal combustion

engine technology that is produced in high volume. The cost improvements made to

date have been achieved through a variety of strategies including improved use and

performance of exotic materials, reduced number of parts, and enhanced manufacturing processes, but further development is required. Ultimately, we need to couple

these technical successes with higher volumes to reduce unit costs.

At UTC Fuel Cells we’re confident about meeting the technical challenges that lie

ahead. Our forty years of experience in this business has taught us that there will

be surprises (both good and bad) along the way and that the best way to learn is

by doing. We’re encouraged by progress to date, but we also know that the last percentage points of improvement are sometimes the most difficult to achieve and the

most costly.

But there are other factors beyond our control that can influence the future of the

hydrogen fuel cell. For example, we must ensure that similar progress is made in

the development of the necessary hydrogen infrastructure including hydrogen production, storage and distribution. Codes and standards and safety procedures must

59

be developed and uniformly adopted. Consumer confidence and acceptance must be

won. The supplier base must be developed and must meet demanding specifications.

A team effort that involves original equipment manufacturers, component and

raw material suppliers, energy companies and governments will be required with

substantial, sustained global investment by public and private partners. Our recipe

for successful fuel cell commercialization includes the following key ingredients:

1. Articulation of a comprehensive, long term national strategy that addresses stationary, portable and transportation applications;

2. Sustained national commitment and leadership;

3. Robust investment by the private and public sector;

4. Public private partnerships for research, development and demonstration programs for both fuel cells and hydrogen infrastructure with a focus on renewable

sources of hydrogen;

5. Development and deployment of hydrogen production, storage and distribution infrastructure;

6. Financial incentives and government purchases;

7. Elimination of regulatory barriers;

8. Harmonized codes and standards in the US and globally;

9. Global involvement with open access to markets; and

10. Education and outreach to ensure consumer acceptance.

We’ve covered a lot of distance in the past few years, but we are engaged in a

marathon not a 100-yard dash. Fuel cell technology has experienced a long gestation

period and will not reach its full maturity for some time. We anticipate the early

adopter vehicle fleets will result in at least 10,000 fuel cell cars, trucks and buses

on the road by 2010 and a substantial amount of stationary fuel cell generation capacity deployed.

This assumes that the technical challenges are met, the private and public sector

make robust investments, suppliers perform as predicted, consumer acceptance is

won and the necessary infrastructure develops as required. If all these efforts come

together successfully, we can see mass production of fuel cell vehicles starting in the

2012-2015 timeframe. We envision a bright future for fuel cells, but recognize the

challenges and uncertainties that we must address collectively.

My testimony today has focused on the progress made to date and the challenges

facing the automotive market since this is both the most challenging and rewarding

application. But UTC Fuel Cells believes that in order to meet the automotive challenge, a national strategy for fuel cell commercialization must focus on stationary

and fleet vehicles to ensure our success in the automotive market and get us there

sooner.

At UTC Fuel Cells we’re proud of our past accomplishments and excited about

meeting the challenges and opportunities that lie ahead so the many benefits of fuel

cells can be enjoyed not just by a lucky few, but on a global scale. We look forward

to working with you, Mr. Chairman and other Members of Congress, to ensure the

fuel cell agenda noted above becomes a reality and the full promise of fuel cell technology is realized.

Thank you Mr. Chairman for the opportunity to testify.

Mr. BARTON. Thank you, sir.

Now we want to hear from Mr. Vesey.

STATEMENT OF GREGORY M. VESEY

Mr. VESEY. Thank you, Chairman Barton, Congressman Wynn,

and members of the subcommittee. ChevronTexaco is pleased to

have the opportunity to testify before the Energy and Commerce

Subcommittee on Energy and Air Quality.

My name is Greg Vesey, and, as President of ChevronTexaco’s

Technology Ventures, I oversee many facets of our company’s advanced energy and technology development and commercialization,

including hydrogen generation and hydrogen infrastructure, and

can share our experience as well as our views regarding the critical

steps required in the development of this technology.

Just by way of background, ChevronTexaco is an integrated global energy company that produces oil, natural gas, transportation

fuels, and other energy products. We operate——

60

Mr. BARTON. We have heard of ChevronTexaco.

Mr. VESEY. We operate in 180 countries and employ more than

53,000 people worldwide. We consider ourselves to be an environmentally responsible company. In addition to supplying global energy, we are also involved in a whole host of advanced clean energy

and fuel technologies.

With regards to fuel cell technology, we believe that fuel cell

technology will continue to evolve. Stationary fuel cells to generate

high-quality power are commercially available in selected operations today, and there are transportation demonstrations underway. We, in fact, have two stationary fuel cells, one powering a

data center in our California office and one powering laboratories

in Houston, Texas.

To meet the challenges involved with this new technology, we are

involved in partnerships, participating in government and private

workshops, and privately fund basic and applied research for hydrogen fuels, storage, and refueling sites. These efforts were underway prior to President Bush’s announcement of the hydrogen initiative in this year’s State of the Union address, and, subsequently,

DOE’s solicitation on infrastructure.

The administration’s actions provide an impetus for the private

sector to focus more attention on the development of this technology. We view new DOE programs as an excellent opportunity to

work in partnership with auto companies and the U.S. Government, especially with regard to fuel production and distribution infrastructure.

Developing a hydrogen infrastructure requires the cooperative efforts of government, auto manufacturers, major energy companies,

and others. Hydrogen is a fuel, not a natural resource. As you may

be aware, oil refineries are the largest current producers and users

of hydrogen. We are leveraging long-standing core competencies in

fuels, catalysis, proprietary gasification, and process engineering

technology, to explore the development of fuel processing business.

The current level of discretionary capital spending on the refining business segment by integrated oil companies has been close to

zero, and investments are being minimized. Integrated energy companies have generally been reducing their exposure to this business

because of our inability to achieve an adequate return on capital.

It is unlikely that U.S. refiners and marketers would create a

substantial new infrastructure investment without believing that

they could obtain a satisfactory economic return for this risk.

The introduction of fuel cell cars must be coordinated with the

introduction of infrastructure. We know that the infrastructure

must be in place before customers buy these cars. We also know

that this will require significant investment, and to be successful

the auto companies and energy companies must work together to

co-develop solutions and support government in private-public partnerships.

Hydrogen must be available when and where it will be needed.

We understand that customers must be confident that hydrogen be

available before they will buy cars that are powered by hydrogen.

It is a significant task to develop technology, to produce the hydrogen at a reasonable cost, to make it available on a broad geographic area, to store it at the sales point, to fuel the cars. And,

61

in addition, the technology must be employed in a safe manner to

achieve total consumer confidence, much as we have discussed

today.

There are 9 million tons per year of hydrogen produced and used

in the United States. This is equivalent to only 1 percent of the

crude oil produced in America. Worldwide production is 40 million

tons per year. Most of this hydrogen is used in refineries, chemical

plants, metals processing, and the electronics industry. Hydrogen

right now is a specialty chemical, and it must be transformed into

a broader energy fuel if it is to be used for transportation.

New codes and standards need to be developed that permit the

development of the infrastructure. Existing building codes and hydrogen system design standards were not developed with consumer

applications in mind. Codes and standards will need to be updated

to reflect the developments in safer hydrogen technologies arising

from the new storage and control system technologies.

Cost of hydrogen to consumers needs to be competitive in the

market with other energy fuels. We need to be convinced that hydrogen can compete with other fuels in the market. This may be

achievable once the demand for hydrogen is substantial. But as of

yet, this has not been demonstrated. The ability to economically

supply hydrogen to the market while the demand is low is difficult.

One opportunity in this area would be for the use of the technology

by the military.

In addition, applications such as airport ground equipment vehicles and fleets of industrial vehicles with centralized and stationary

refueling need to be successful before consumers become a significant user of this technology.

A few public policy recommendations—we believe that there are

several areas that are critical to the development of this technology

and recommend the following. Support the technology development

and validation for hydrogen infrastructure. We see the DOE-sponsored controlled hydrogen fleet and infrastructure demonstration

and validation project as a positive step that will create opportunities to move the technology forward.

Public education. It is important that the public understand the

market drivers, environmental benefits, costs, and challenges associated with each stage of transition. We must leverage private industry stakeholders. We believe that this will help make the technology commercial, and also focus government priorities on areas

where there is most need. The only way to accelerate efforts toward

commercialization of this market is for the private industry and

government to share the development costs.

And we must monitor market signals. Often we see that factors

can change the need for a particular technology, either increasing

or decreasing demand. To embark on a long-term major government initiative without doing mid-course reviews would be a mistake. Periodic reviews will be necessary to assess progress and

steer or change policy as needed and implement appropriate midcourse corrections.

Thank you for the opportunity to testify. I look forward to questions.

[The prepared statement of Gregory M. Vesey follows:]

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PREPARED STATEMENT OF GREGORY M. VESEY, PRESIDENT, TECHNOLOGY VENTURES, CHEVRONTEXACO

Chairman Barton, Ranking Member Boucher, and Members of the Subcommittee:

ChevronTexaco is pleased to have the opportunity to testify before the Energy and

Commerce Subcommittee on Energy and Air Quality on DOE’s hydrogen programs

and the future of advanced energy technologies.

As ChevronTexaco’s President of Technology Ventures, I oversee many facets of

our company’s new energy technology development and commercialization, including

hydrogen generation and hydrogen infrastructure, and can share our experience as

well as our views regarding the critical steps required in the development of this

technology.

By way of background, ChevronTexaco is an integrated, global energy company

that produces oil, natural gas, transportation fuels and other energy products. We

operate in 180 countries and employ more than 53, 000 people worldwide.

ChevronTexaco is the second-largest U.S.-based energy company and the fifth largest in the world, based on market capitalization. We consider ourselves to be an environmentally responsible company. In addition to supplying global energy, we are

also involved in a whole host of advanced clean energy and fuel technologies. We

believe that ChevronTexaco’s Worldwide Power and Gasification business unit is a

world leader in gasification technology which is a reliable, efficient, and clean technology that converts hydrocarbons, such as coal, for the production of power, fuels,

chemicals and industrial gases, such as hydrogen. Commercial examples of the use

of our technology include Tampa Electric Power Company’s Polk facility that produces electricity and Eastman Chemical Company’s Kingsport, Tennessee facility

that produces chemicals.

With regards to fuel cell technology, we believe that fuel -cell technology will continue to evolve. Stationary fuel cells to generate high quality power are commercially available in selected operations today and there are transportation demonstrations underway.

ChevronTexaco has installed two stationary fuel cells at our facilities in San

Ramon, California and Houston, Texas. These fuel cells convert hydrogen from natural gas into electricity, clean water and usable heat, and provide secure digitalgrade power to select information technology systems and laboratories. We undertook these projects to gain experience with designing and installing stationary fuelcell systems, and to help us translate this experience into other types of fuel cell

projects. We are working on hydrogen infrastructure development issues, including

production, storage, and distribution.

CHEVRONTEXACO’S RESEARCH AND DEVELOPMENT INITIATIVES

We continue to support development of hydrogen generation and hydrogen storage

systems. We are active in research and development to create safe methods for storing and delivering hydrogen. New opportunities to develop the technology may be

presented through demonstrations, including the DOE’s recently announced ‘‘Controlled Hydrogen Fleet and Infrastructure Demonstration and Validation Project.’’

To meet the challenges involved with this new technology, we are involved in partnerships, participate in government and private workshops, and privately fund basic

and applied research for hydrogen fuels, storage, and refueling sites. These efforts

were underway prior to President Bush’s announcement of the Hydrogen Initiative

in this year’s State of the Union address and subsequently, DOE’s solicitation on

infrastructure. The Administration’s actions provide an impetus for the private sector to focus more attention on the development of this technology. We view new

DOE programs as an excellent opportunity to work in partnership with the auto

companies, States, the U.S. government and other critical parties, especially with

regard to fuel production and distribution infrastructure. Developing a hydrogen infrastructure requires the cooperative efforts of the government, auto manufacturers,

major energy companies, and others.

An example of the type of activity that we are involved in includes:

California Fuel Cell Partnership: We continue to work with auto companies, other

energy partners and government agencies, to provide hydrogen to operate a project

facility that safely delivers high-pressure hydrogen to demonstration vehicles.

In addition, as part of this effort ChevronTexaco engages and supports important

R&D initiatives including:

Hydrogen Production: Hydrogen is a fuel—not a natural resource. It must be manufactured from other sources, so how the supply system is developed is critical. The

two primary sources of hydrogen are water and hydrocarbons. For the past 50 years,

we have been engaged in the conversion of hydrocarbons to hydrogen through refinery and gasification processes. As you may be aware, oil refineries are the largest

63

current producers and users of hydrogen. We are leveraging long-standing core competencies in fuels, catalysis, proprietary gasification and process engineering technology to explore the development of a fuel-processing business. This includes understanding the total environmental consequences and costs of making hydrogen

from many different sources. Though many fuel cell systems include reformers that

convert natural gas or other fuels to hydrogen at the site, cost effective hydrogen

production and distribution technologies will enable a wider range of fuel-cell systems to operate. We are also looking at electrolysis to produce hydrogen from water,

however as we focus on the transition to a hydrogen based market it is clear that

making hydrogen from readily available hydrocarbon fuels is currently far more cost

competitive with today’s fuels. We have developed relationships with leading fuelcell developers, utilities and technology companies in an effort to introduce competitive fuel-cell systems into the market. We have hydrogen generators in long term

testing that will convert a hydrocarbon feedstock, such as natural gas or liquid hydrocarbons, into hydrogen.

Delivery of Hydrogen: One other challenge is how hydrogen would be distributed

in a decentralized manner. We are working to design a delivery infrastructure that

is economic and safe. We are developing infrastructure systems to incorporate and

integrate a range of new technologies including hydrogen extraction from natural

gas, safe-site storage technologies, and advanced hydrogen detection and control systems to ensure safe handling and use. This is an array of technical challenges that

will require involvement of many industry technology providers as well as public

and government agencies.

Hydrogen Storage: Hydrogen storage is a critical part of the infrastructure development. Distribution of fuels for commercial use must provide for hydrogen storage.

We are currently engaged in the R&D and commercialization of new hydrogen storage technology through partnerships and internal efforts. Our objective is to provide

safe reliable products capable of meeting a wide range of applications including

small portable, automotive, and bulk storage applications.

COMMERCIAL AND INFRASTRUCTURE CHALLENGES

We have operated in the refining and marketing business segment for over 100

years. The financial investment has been very large. The current level of discretionary capital spending on the refining business segment by integrated oil companies has been close to zero and investments are being minimized. Integrated energy

companies have generally been reducing their exposure to this business because of

our inability to achieve an adequate return on capital. This has created an environment where refining assets have been sold for about 20% to 40% of replacement

cost. It is estimated that six to nine refineries may be up for sale in the U.S. within

the next 12 months either because of weak business conditions or Federal Trade

Commission mandates. It is unlikely that U.S. refiners and marketers would create

a substantial new infrastructure investment without believing that they could obtain a satisfactory economic return to compensate for this risk.

The introduction of fuel-cell cars must be coordinated with the introduction of the

infrastructure. We know that the infrastructure must be in place before customers

buy these cars. We also know that this will require significant investment and that

to be successful the auto companies and energy companies must work together to

co-develop solutions with support of government in private/public partnerships.

Hydrogen must be available when and where it will be needed. We understand that customers must be confident that hydrogen will be available before they

will buy cars powered by hydrogen. It is a significant task to develop technology to:

1. produce the hydrogen at a reasonable cost;

2. make it available over a broad geographic area;

3. store it at the sales point;

4. fuel the cars; and

5. in addition, the technology must be employed in a safe manner to achieve total

consumer confidence.

There are 9 million tons per year of hydrogen produced and used in the United

States. This is equivalent to only 1% of the crude oil produced in America. Worldwide production is 40 million tons per year. Most of this hydrogen is used in refineries, chemical plants, metals processing and the electronics industry. Hydrogen

right now is a specialty chemical, and it must be transformed into a broader energy

fuel if it is to be used for transportation.

Storing hydrogen in the car, at the refueling station and throughout the

delivery infrastructure is a sizable challenge that is unmet thus far. The

problems are different at each location, and they each deserve the attention of industry, national labs and the DOE. Much attention is given to storing hydrogen on

64

board the car, and rightly so, but similar attention is needed in the other places

that hydrogen needs to be stored. We are working to develop this technology, but

there is still more work to be done before a standard is embraced.

Eventually the hydrogen market may be big enough that we can make hydrogen

in large centralized plants, similar to refineries today. But then the hydrogen still

needs to be distributed across the country. Once large centralized plants are built,

it will be possible to capture a significant portion of the carbon dioxide made as a

by product. Capturing, inertly storing or sequestering large volumes of CO2 are two

distinct challenges yet to be overcome.

New codes and standards need to be developed that permit the development of the infrastructure. Existing building codes and hydrogen system design

standards were not developed with consumer applications in mind. Today’s codes

provide large distance ‘‘setbacks’’ from other facilities that limit the locations where

hydrogen can be manufactured, stored and dispensed. This was appropriate for the

technology and hydrogen applications of the 20th century, but they make retrofits

of existing sites with limited area for expansion impractical for future hydrogen facilities.

Codes and standards will need to be updated to reflect the developments in safer

hydrogen technologies arising from the new storage and control system technologies.

In some cases, building codes will need to be strengthened to ensure safe maintenance facilities. Through research and demonstration of hydrogen generation and

storage technology we will be able to gain the necessary safety knowledge which will

lead to data driven codes and standards that do not currently exist.

The cost of hydrogen to consumers needs to be competitive in the market

with other energy fuels. We need to be convinced that hydrogen can compete with

other fuels in the market. This may be achievable once the demand for hydrogen

is substantial, but as of yet this has not been demonstrated. The ability to economically supply hydrogen to the market while the demand is low is difficult.

Coordination between the auto companies and energy companies for decisions on

optimal geographic demonstration fleets of fuel-cell cars and buses will be important

to get the infrastructure started and to prove the value and functionality of the fuelcell vehicle and infrastructure. Specialty applications and niche markets that use

much of the same technology but in different products are going to be important

and will be a signpost along the path. One opportunity in this area would be for

use of the technology by the military. In addition, applications, such as airport

ground equipment vehicles and fleets of industrial vehicles with centralized and stationary refueling, need to be successful before consumers become a significant user

of this technology.

PUBLIC POLICY RECOMMENDATIONS

We believe that there are several areas that are critical to the development of this

technology. We recommend the following:

1. Support the Technology Development and Validation For Hydrogen Infrastructure:

We see DOE’s sponsored ‘‘Controlled Hydrogen Fleet and Infrastructure Demonstration and Validation Project’’ as a positive step that will create opportunities to move the technology forward. It is essential that DOE integrate the infrastructure issues simultaneously with fuel cell vehicle development. Major energy companies that already support this nation’s fuel infrastructure have a key

role to play in the development of hydrogen based energy. ChevronTexaco is

committed to helping the U.S. move towards safe and cost competitive solutions.

This should be a high priority in terms of DOE and other government R&D support.

2. Public Education: When new technologies are on the horizon, there is a lot of fanfare and media attention surrounding the development of the technology. Unfortunately, this leads to unrealistic public expectations. As the hydrogen market

evolves over the next few decades, technology breakthroughs will change the

way hydrogen is made and supplied to the consumer. It is important that the

public understand the market drivers, environmental benefits, costs and challenges associated with each stage of the transition.

3. Leverage Private Industry Stakeholders: We believe that this will help make the

technology commercial, and also focus government priorities on areas where

there is the most need. ChevronTexaco has already invested in R&D efforts in

the areas of hydrogen generation and storage, however the private sector alone

can not provide the resources and capital necessary in a technology that may

not see any sort of return for decades. The only way to accelerate efforts towards commercialization of this market is for private industry and government

to share the development costs.

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4. Monitor Market Signals: Often we see that factors can change the need for a particular technology—either increasing or decreasing demand. Some of these factors may include competing technologies, availability of resources and public

opinion. To embark on a long-term major government initiative without doing

mid-course reviews would be a mistake. Periodic reviews will be necessary to

assess progress and steer or change policy as needed and implement appropriate mid-course corrections.

I should note that this year’s energy bill, H.R. 6, passed by this Committee and

the House does include several provisions to address infrastructure issues with this

energy technology as well as other advanced energy technologies.

Thank you for the opportunity to testify and I would be happy to answer any

questions.

Mr. BARTON. Thank you, sir.

We now want to hear from Dr. Samuelsen.

STATEMENT OF SCOTT SAMUELSEN

Mr. SAMUELSEN. Mr. Chairman, and members of the committee,

thank you for the opportunity to provide testimony today on the

hydrogen energy economy. I direct the National Fuel Cell Research

Center and serve as a Professor of Mechanical, Aerospace, and Environmental Engineering, at the University of California at Irvine.

The National Fuel Cell Research Center is deeply engaged in the

hydrogen infrastructure and fuel cell vehicle. Last December, for

example, the Center deployed the first commercial hydrogen-fueled

fuel cell vehicle into the marketplace and commissioned a hydrogen

fueling station. In the next 6 months, working with the South

Coast Air Quality Management District, the Center will deploy in

two cities in Southern California additional hydrogen fueling infrastructure.

The frenzy generated by the President’s State of the Union address has dramatically accelerated the otherwise controlled and

competitive emergence of the hydrogen future. While exciting, this

acceleration demands of Congress leadership, I believe, in order to

assure a safe, sensible, and successful evolution of the new paradigm.

If you will allow, let me identify 5 examples of congressional

leadership opportunity. The first is congressional leadership to assure university research programs that both advance the technologies and basic understanding needed for both hydrogen and

fuel cells, but also train undergraduate and graduate students to

meet the demands of the emerging industries, some of whom you

are hearing from today.

A second area of leadership is needed to prioritize the renewable

technologies that will be needed for large volume hydrogen generation. I commend the Office of Energy Efficiency and Renewables,

and the leadership of David Garman as we witnessed this morning,

for providing the early planning and initial studies and research

demonstrations in this area.

Third, recognizing that renewable energy is not sufficient, the

congressional leadership needs to facilitate a 20-year roadmap for

the development and deployment of fossil fuel-based hydrogen generation technologies that are both energy efficient and environmentally responsible.

The President Future Gen Program is a hallmark step in this

roadmap, undoubtedly. Also, the Vision 21 Program that has been

successfully initiated by the Department of Energy.

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The fourth example is especially profound and may catch you a

bit off guard. It is the assurance of the development and deployment of stationary hybrid fuel cell gas turbine combinations. This

hybrid—stationary hybrid now—is a synergism that is showing a

performance not before seen in engineering of ultra high conversion

efficiencies. Fueled electrical conversion efficiencies, for example, of

over 75 percent on natural gas.

The leadership of the Department of Energy, Office of Fossil Energy, under the direction of Assistant Secretary Michael Smith, for

the development and deployment of such systems will undoubtedly

change the manner by which electricity is generated in the future

and how hydrogen is generated throughout the world.

Fifth, congressional leadership is needed to provide a path to national standardized codes and standards. We have outstanding

codes and standards for industrial use of hydrogen, such as generation and distribution, but not for the public use, such as dispensing

and utilization.

The industry and technical societies have done a remarkable job

in developing the industrial standards, but this frenzy and acceleration of the hydrogen future creates a responsibility, I believe, for

congressional leadership to assure a coordinated evolution of national-based standards that is also integrated into the international

community, which is also, of course, not only within the market

base but developing standards as we speak.

In conclusion, I thank the committee for the opportunity to comment. The President’s leadership has opened a window of opportunity for the hydrogen initiative as outlined in the 2004 budget.

But the time to act is limited, and the opportunity for congressional

leadership will rapidly close.

I look forward to the questions. Thank you for this opportunity.

[The prepared statement of Scott Samuelsen follows:]

PREPARED STATEMENT OF SCOTT SAMUELSEN, DIRECTOR, NATIONAL FUEL CELL

CENTER, UNIVERSITY OF CALIFORNIA

Mr. Chairman and Members of the Committee, thank you for the opportunity to

provide testimony on hydrogen, hydrogen-fueled combustion and fuel cell vehicles,

and regulatory encouragement for incorporating hydrogen fuel into the consumerbased energy economy. I direct the National Fuel Cell Research Center at the University of California, Irvine, and serve as a Professor of Mechanical, Aerospace, and

Environmental Engineering.

The National Fuel Cell Research Center was established by the U.S. Department

of Energy and the California Energy Commission in 1998, along with a strategic alliance of industry, to accelerate the growth of fuel cell deployment in the nation and

around the world. The principal focus of the Center is the development and deployment of stationary fuel cells systems for home, commercial, and industrial power,

and for the fueling infrastructure in support of hydrogen powered vehicles. The stationary fuel cell represents a major role in the hydrogen fuel economy of the future.

To investigate the future, the National Fuel Cell Research Center last December

deployed the first commercial hydrogen-fueled fuel cell vehicle into the United

States, and commissioned a hydrogen refueling station. Over the next six months,

the Center will deploy two addition hydrogen refueling stations in Orange County.

The Center conducts the anchor research for the U.S. Department of Energy for the

design of stationary fuel cell systems in order to provide energy efficient and environmentally responsible co-production of electricity and hydrogen as a vehicle fuel.

Until a few months ago, the hydrogen future was emerging at a controlled pace

with international competitive forces creating both hydrogen-fueled vehicles, and a

hydrogen fueling infrastructure. Both are remarkable in their own right as they represent dramatic paradigm shifts for the public: the power plant under the hood on

67

the one hand, and the fuel to power the vehicular population on the other. We are

witnessing and experiencing both in parallel.

The gasoline engine has evolved over ninety years to become a reliable, safe, and

inexpensive power plant. The gasoline fueling refining and distribution infrastructure has also experienced nearly a century of development to where we today park

a vehicle with 20 gallons of liquid fuel in our home garage, often in the presence

of natural gas flames that heat water, furnaces, and clothes dryers. We are in the

1920’s of the hydrogen fueling infrastructure and fuel cell engine.

The frenzy generated since the State of the Union address has dramatically accelerated the otherwise controlled and competitive emergence of the hydrogen future.

While exciting, this acceleration demands a parallel commitment on the part of Congress to provide key leadership and thereby assure a successful, sensible, and safe

evolution of these two new paradigms. Allow me to identify five examples of Congressional Leadership Opportunities:

1. Assure a robust and active university research program that both advances the

state-of-the-art in fuel cell research and trains the undergraduate and graduate

students necessary to the meet the demands of a growing hydrogen and fuel cell

industry.

2. Prioritize the evolution of environmentally sensitive and efficient renewable technologies for large scale hydrogen generation.

3. Recognizing that renewable energy will not be sufficient, facilitate a twenty-year

technology development and deployment roadmap for energy efficient and environmentally responsible fossil fuel based technologies for hydrogen production.

4. Assure U.S. leadership in the development and deployment of stationary fuel cell/

gas turbine hybrid technology that can co-produce electricity and hydrogen at

efficiencies exceeding 70 percent, operating on either natural gas or coal.

5. Establish a path to establish national standardized codes and standards for the

public utilization of hydrogen.

(1) University Programs.

The National Fuel Cell Research Center has over twenty graduate students, a

staff of twelve, and over fifteen faculty. Through its outreach, over one hundred faculty from around the country participate in the ‘‘Universities for Fuel Cells’’ program sponsored by the U.S. Department of Energy, and the U.S. Department of Defense.The fuel cell was invented in 1839, over one hundred and fifty years ago. The

first significant use of fuel cell technology was lead by NASA in the 1960’s to power

space vehicles. Similar to a car battery, fuel cells are fed a continuous flow of hydrogen fuel and oxygen. As a result, they produce a continuous and efficient flow of

electricity with virtually no noise and near zero emission of criteria pollutants.

Due to the investment of Congress and industry in fuel cell technology, we are

now witnessing the emergence of commercial stationary fuel cells to power homes,

commercial buildings, and industry, and the introduction of commercially designed

automobiles. We also see the emergence of fuel cells for laptops and bio fuel cells

for implantation in the body. The future is, indeed, remarkable and exciting.

The irony is that, while the fuel cell is emerging to become pervasive throughout

society over the next two decades, little attention is given to the fuel cell in today’s

engineering curriculum, and in today’s university research. It is tantamount to the

emergence of the transistor in the early 1960’s. As a result, our graduate students

are peeled out of our program by industry before they can conclude their theses and

dissertations.

The ‘‘Universities for Fuel Cells’’ program is designed to bring together key researchers from Universities and National Laboratories in order to focus on critical

technology areas that are in need of research and development in order to hasten

the advancement of fuel cells. The specific focus areas are: (1) materials, (2) systems

and controls, (3) power electronics, (4) fuel processing, (5) manufacturing, and (6)

simulation. Among its activities, Universities for Fuel Cells hosts workshops to

prioritize needed R&D topics for the U.S. DOE, NSF and other state and federal

agencies, and to establish collaborative R&D efforts between universities, national

labs, industry and agencies. A long-term goal of this effort is to strengthen the university research community so that it may play a role as a full partner with industry and provide attractive career options for our most talented graduate students.

If the national effort to capitalize on the full potential of hydrogen economy is to

be successful, a leadership opportunity for Congress is to assure that federal mandates incorporate university contributions. University research not only brings fundamental research advances in engineering, the physical and biological sciences, social and business sciences in supporting the fuel cell and hydrogen future, but also

assures that an educated workforce is developed to fill the requirements of industry

and assure a strong U.S. presence in national and international fuel cell and hydroVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00071 Fmt 6633 Sfmt 6621 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
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gen markets. The current solicitations in support of the hydrogen future do not include substantial university research opportunities. An example and model of a successful engagement of universities in support of a national mission is the recent Department of Energy Advanced Turbine Systems Program. [Congressional Leadership

Opportunity #1]

(2) Hydrogen Production From Renewables

The hydrogen future portends an opportunity use a fuel that produces only water

as a by-product.

This is the public perception by many and reflects a vision conveyed by the President in the 2003 State of the Union.

In reality, water is not the only by-product. For fuel cells (either mobile or stationary) directly fueled by hydrogen, this statement is almost true. In addition to

water, a small amount of nitric oxide (a criteria pollutant associated with the formation of photochemical oxidant in urban air sheds) is emitted. Emissions may also

include degradation products of the fuel cell stack.

For hydrogen used in combustion engines, the nitric oxide emission will be an

order of magnitude higher and comparable to the best engines operating today on

conventional natural gas and liquid fuels.

In addition to these by-products that some might argue are minor, there is no argument that major pollutant and greenhouse gas by-products can be emitted in the

generation of hydrogen.

While abundant, hydrogen is not available for use without a process to extract

and transport the hydrogen from the point of generation to the point of use. If not

addressed by Congress, the hydrogen generation to meet future demands will dramatically reduce U.S. energy efficiency, increase fuel dependence, and dramatically

increase U.S. environmental impacts. No one of these outcomes is desirable. Congress has the opportunity to assure that a more desirable route emerges.

For example, the most energy and environmentally benign generation of hydrogen

is the electrolysis of water using electricity from renewable sources such as wind,

sun, and water, captured by wind turbines, photovoltaic cells, and hydroelectric turbines. For these technologies, air pollutant emissions will be associated only with

the transport of the hydrogen to the point of use. For transport by diesel truck,

emissions will include NO, carbon monoxide (CO), hydrocarbons (HC), and particulate (PM). For transport by pipeline, emissions will be associated with the electricity

needed to power compression of the hydrogen to elevated pressures.

I commend the Office of Energy Efficiency and Renewables and the direction of

Assistant Secretary David Garman on the planning and early initiatives in this

area. Technology and policy to incentivize and sustain a major deployment of renewable energy for the production of hydrogen, and the use of pipelines to transport the

hydrogen to the point of use should serve as a major focus for Congressional leadership to assure an environmentally responsible hydrogen future. [Congressional

Leadership Opportunity #2]

(3) Hydrogen Production From Fossil Fuels

The most optimistic projections of renewable energy technologies, however, will

not produce the hydrogen demanded by societal demand. The rule of thumb for a

most optimistic projection is 1⁄3 of the total hydrogen by renewable sources, and 2⁄3

from non-renewable sources such as natural gas, petroleum, coal, and nuclear.

The principal non-renewable source for hydrogen today is the reformation of natural gas. In well-designed systems, the by-product emission will be limited to carbon

dioxide (CO2). While not a criteria pollutant species, CO2 is a greenhouse gas and

most closely aligned to global climate change. In reforming natural gas for the generation of hydrogen, care is required to assure that the overall emission of CO2 (gm/

kw-hr) is equal to or preferably less than the direct fueling of a combustion engine.

The goal should be a substantial reduction. But in the absence of Congressional

leadership, the reality may well be a substantial increase.

To assure fuel independence and to tap a major source of hydrogen, coal is the

principal candidate. Today, the use of coal as a source of hydrogen would substantially degrade the environment. Technologies are under development to reverse this

consequence, and the recently announced $1B program by the President to produce

an environmentally sensitive coal plant for the co-production of electricity and hydrogen is one example. Under the Department of Energy ‘‘Vision 21’’ program, remarkably energy-efficient and environmentally responsible designs for the co-production of electricity and hydrogen have been established for both natural gas and

coal. Leadership from Congress is required to assure that these early Congressional

investments in Vision 21 are nurtured and sustained to assure the development of

natural gas and coal technologies that are both energy-efficient and environmentally

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responsible in the co-production of both electricity and hydrogen. [Congressional

Leadership Opportunity #3]

(4) Stationary Fuel Cell/Gas Turbine Hybrid Technology

To maximize the energy efficiency promise of a hydrogen fuel economy, we must

foster a key technology: the hybrid marriage of a stationary fuel cell and a gas turbine engine. The fuel cell produces electricity directly and also emits, as a byproduct, a high-pressure and high-temperature stream of water vapor and air which is

used to turn a turbine generator, producing still more electricity. This so-called ‘‘hybrid’’ technology has a synergism of performance never before witnessed in engineering. Rather than the 30 to 40% conversion of fuel energy-to-electricity (to which we

are accustomed with conventional combustion technologies), conversion efficiencies

approaching 80% appear possible. In addition to the high-electrical conversion efficiency, co-production of hydrogen is a major attribute of hybrid technology. The

leadership of the Department of Energy Office of Fossil Energy, under the direction

of Assistant Secretary Carl Michael Smith, to develop and demonstrate this technology will likely change the manner by which electricity is generated in the future,

and the manner by which hydrogen is produced.

Stationary fuel cell/gas turbine hybrid technology is a major key to:

U.S. Fuel Independence. Hybrids provide a unique opportunity to generate electricity at remarkably high efficiencies, co-produce hydrogen, and utilize either natural gas or coal with zero emission of criteria pollutants and the production of a

pure CO2-sequesting ready stream. The range of application extends from distributed generation (up to 50 megawatts) to the Vision 21 Central Power (exceeding 300

megawatts).

U.S. International Product Dominance in Future Energy Markets. Recent U.S.

demonstrations with 200kW class units have confirmed the credibility of such systems. Based on these successful U.S. Department of Energy initiatives, three countries (three in the Pacific Rim alone) have been inspired to initiate multi-year development projects for hybrid technology. The United States has not established a hybrid technology road map.

Capturing the U.S. leadership in hybrid technology will require Congressional

leadership. [Congressional Leadership Opportunity #4]

(5) Codes and Regulations.

Codes and standards for hydrogen have been developed for industrial applications

of hydrogen, but not for public use of hydrogen. With the emergence of hydrogen

into the public domain, attention is required to assure that codes and standards

evolve in a timely fashion to assure public safety.

To place this into perspective, the public use of hydrogen divides into four principal areas: generation, distribution, dispensing, and utilization.

Generation. In the hydrogen consumer economy, hydrogen generation will occur

at the site of dispensing (‘‘on-site generation’’) or at large sites in remote locations

(e.g., coal fired power plants, wind-farms) and the hydrogen transported by truck

or by pipeline to the point of use.

For large generation sites, the hydrogen generation will occur in classical industrial zoned locations and be operated as classical industrial plants. As a result, current industrial codes and standards are likely sufficient.

For the on-site generation sites such as hydrogen fueling stations (and perhaps

even home garages some day), safety codes and standards do not today exist.

Distribution. Distribution is the transport of hydrogen from the point of generation to the point of use. In the case of automobile refueling, the point of use would

be the dispensing station. On-site generation, by definition, does not require distribution. As a result, no additional codes or regulations are required.

For large generation sites, transport of the hydrogen by truck or pipeline will be

necessary. In both cases, codes and standards have been established. Due to the

substantial expansion of the trucking (number of trucks, frequency of use) and pipelines (expanding from an existing 17 miles, for example, in southern California to

hundreds of miles) associated with the hydrogen future, expanded codes and regulations will undoubtedly be appropriate

Dispensing. Dispensing (‘‘automobile refueling’’) is a very public-intensive activity,

particularly with the evolution of the ‘‘self-serve’’ era. Codes and regulations are in

an embryonic stage, and requirements for standardization (for example, one ‘‘nozzle’’

for all vehicles; one hydrogen fuel state for all vehicles), while critical to the success

of hydrogen deployment, are also in an embryonic state. ‘‘Dispensing’’ is the first of

two areas in which Congressional leadership is immediately required to assure (1)

an efficient evolution of a robust market, (2) the evolution of a safe market that is

70

accident scarce versus accident prone, and (3) the evolution of an internationally

competitive market.

Utilization. Utilization is the second of the two areas in which national leadership

is immediately required for the same reasons noted above. Utilization encompasses

the use by the public of vehicles fueled with hydrogen, and during many years of

transition (ca. two decades) the interaction of the public driving conventional gasoline powered vehicles alongside hydrogen-fueled vehicles, and the parking of hydrogen-fueled vehicles in home garages, public parking spaces and parking structures.

Up until January 28, the codes and standards for the public hydrogen economy

were emerging following the traditionally successful process of industrial working

groups and professional societies. While this continues, the State of the Union acceleration of the hydrogen future creates a need for Congressional Leadership to assure that the acceleration of the otherwise multi-year process does not compromise

the final product, and the engagement of individual states in the creation of codes

and standards does not adversely complicate the market or place the public at risk.

The President’s leadership has opened the window of opportunity with the Hydrogen

Initiative as outlined in the 2004 budget, but the time to act is limited and the opportunity will rapidly erode. Already, states are introducing legislation. [Congressional Leadership Opportunity #5]

In conclusion, I thank the committee for the opportunity to comment and to state

my sincere encouragement of the committee in this important work. Regulations are

often perceived as obstacles. However, a consistent, rational regulatory structure,

which is predictable for industry and consumers, serves not as an obstacle but rather a well-lighted pathway to our shared energy future. Thank you for listening to

my testimony today and I welcome the opportunity to respond to your questions.

Mr. BARTON. Thank you, Dr. Samuelsen.

Last, but certainly not least, we want to hear from Dr. Schwank.

STATEMENT OF JOHANNES SCHWANK

Mr. SCHWANK. Thank you, Mr. Chairman, and members of the

subcommittee. My name is Johannes Schwank. I am a Professor of

Chemical Engineering at the University of Michigan, and I coordinate the hydrogen-related energy activities there.

Today I would like to address the research challenges that we

must overcome as we move to a hydrogen-based energy economy

and touch on some of the ongoing activities at the University of

Michigan. And, finally, I would like to propose a plan for better

leveraging of our Nation’s research universities to address this

challenging problem.

Today, we are at the key formative stage of the hydrogen economy. It is important to lay a sound scientific foundation that covers

a broad spectrum of hydrogen-related research issues. We must

better understand the pros and cons of all our technology options

before deciding on winning technologies. This can best be accomplished by more effectively engaging the Nation’s research university system.

Current federally sponsored research efforts are a patchwork at

best. While there have been a number of effective workshops and

roadmap exercises like this hydrogen roadmap, there is no coordinated research program presently in place.

While some universities, including the University of Michigan,

have received Federal support for hydrogen-related research

projects, the scope and scale of these academic programs is inadequate. If we as a Nation are going to succeed in leading the transition to a hydrogen economy, then we must create a more comprehensive and coordinated university-based research initiative.

The magnitude of such a program should be on par with national

science and technology initiatives like the information technology

research initiative or the national nanotechnology initiative.

71

Three of the most important research challenges in front of us

are hydrogen generation, hydrogen storage, and hydrogen utilization. I have summarized some of the major research issues for each

of these three areas in my written testimony.

The first question is: where do we get our hydrogen? From fossil

fuels or from water? Just like it takes money to make money, in

the case of hydrogen energy it takes energy to make energy. This

energy can come from a number of possible sources, such as fossil

fuels, hydroelectric, nuclear energy, or solar. I submit that the jury

is still out on which of these energy sources will dominate future

hydrogen production.

For the next couple of decades, we can still count on our supply

of fossil fuel to make hydrogen. The U.S. has an enormous infrastructure investment from oil refineries to local gas stations. We

must find a way to use this existing infrastructure to make hydrogen.

At the University of Michigan, we have a DOE-funded research

program to turn gasoline into hydrogen. For the long term, however, we have to turn to water as our hydrogen source. We must

have a university-based research program on fossil fuel and on

water-based hydrogen generation.

The second question is: how do we store hydrogen? Finding safe

and economical ways to store hydrogen is critical for fuel cell powered cars. At the University of Michigan, we are working on promising new storage materials. However, we have a long way to go.

We must have a university-based research program to bring the

storage capacity of materials to technically acceptable levels.

The third question is: how do we make the best use of hydrogen?

One of the reasons for making and storing hydrogen in large quantities is that we want to use it to power fuel cell stacks. A reasonable characterization of hydrogen fuel cell technology is that many

of the engineering issues have already been solved.

We have been hearing about practical applications in this hearing. However, major obstacles remain. Current fuel cells are still

very expensive and have problems with durability. Most of today’s

fuel cell stacks do not even come close to the reliability we expect

from household appliances or car engines. At the University of

Michigan, we are working on these reliability problems.

I note that hydrogen can also be burned in internal combustion

engines. This lowers the emissions and gives better fuel efficiency.

But further research is needed to better understand how hydrogen

behaves under normal engine operating conditions.

The University of Michigan has a large automotive research center working on the utilization of hydrogen. We must have a university-based research program on fuel cells and hydrogen-powered

combustion engines.

We believe that today we have a tremendous opportunity, even

a responsibility, to leverage the country’s research universities in

partnership with industry and government to build a robust and

sustainable hydrogen economy. I propose that a university-based

hydrogen energy research initiative, ERI for short, be established

at either the National Science Foundation or the Department of

Energy.

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This initiative would competitively select a group of 6 to 10 universities to undertake an integrated set of basic research and education projects. Each center would work in partnership with industry and government, and more details about this are in the written

testimony.

For our Nation, it is of critical strategic and economic importance

that the academic, industrial, and government sectors work together to assure that we lay a strong research foundation, permitting us to select the best pathways and technologies leading to our

hydrogen-based energy future.

I thank you, and I am looking forward to questions.

[The prepared statement of Johannes Schwank follows:]

PREPARED STATEMENT OF JOHANNES SCHWANK, PROFESSOR OF CHEMICAL

ENGINEERING, UNIVERSITY OF MICHIGAN

Mr. Chairman and Members of the Subcommittee: Good morning. My name is Johannes Schwank. I am a Professor of Chemical Engineering at the University of

Michigan, and coordinate the hydrogen research activities within the College of Engineering. I would like to thank you for the opportunity to appear before you today

to provide a perspective from the University of Michigan concerning the importance

of hydrogen—based energy technologies and the important role the academic community can play in their development.

Let me begin by commending the Congress and particularly the House Subcommittee on Energy and Air Quality for its efforts to facilitate the better understanding of the science and technology challenges posed as we move to a hydrogenbased energy future.

Today, I would like to address the significant research challenges that we must

overcome if we are going to see a hydrogen-based economy. I will describe some of

the ongoing activities at the University of Michigan. And finally, I will propose a

plan for better leveraging the capabilities of our research universities in solving the

Nation’s energy and environmental problems.

We find ourselves at the threshold of a worldwide shift from a fossil fuel economy

to a hydrogen economy. Hydrogen-based energy, its supply and its use, will be a

critical factor in economic growth, political stability, and the protection of our environment. This may be one of the greatest scientific, technical, and economic challenges our society faces in the coming decades. To bring this transition about will

require significant technical advances and enormous investments in new materials,

processes, and infrastructure. The consensus in the industrial and academic sector

is that we must find economically and technically sound ways to produce, store, distribute, and utilize hydrogen.

At this formative stage of the hydrogen energy economy, it is important to lay a

sound scientific and technical foundation, encompassing a wide spectrum of hydrogen-related fundamental and applied research issues. We must better understand

the pros and cons of all our technology options, before deciding on winning technologies. A broader approach placed at the beginning of the product/process development spectrum is required. This can best be accomplished by using the Nation’s research university system. It is critically important that the Nation invest in a basic

energy research program at the university level to address the inherent fundamental research challenges. Current federally sponsored research efforts are a

patchwork at best. There is no coordinated research program presently in place. Although some universities, including the University of Michigan, receive federal support for research projects that address some aspects of hydrogen-based energy research, the scope and scale of the federal effort to overcome the important technical

challenges is sorely inadequate. If we as a Nation are going to see the transition

to a hydrogen economy as envisioned by this hearing, securing our technical leadership position in the world, then we must create a more comprehensive and coordinated program. The magnitude of such a program should be on par with national

science and technology initiatives like the Information Technology Research initiative or the National Nanotechnology Initiative. I will briefly illustrate three of the

key research challenges in front of us: hydrogen generation, hydrogen storage, and

hydrogen utilization.

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RESEARCH CHALLENGES

Hydrogen Generation

The first question is: how do we secure an adequate hydrogen supply? Pure hydrogen does not occur naturally, and must be generated from other substances, for example coal, petroleum, natural gas, biomass, or water. This costs us some energy

upfront that can come from a menu of possible sources: fossil fuel, hydroelectric or

nuclear energy, solar, wind power, geothermal, or tidal energy. I submit that the

jury is still out on which of these energy sources will dominate future hydrogen production.

Let’s look at our options for generating hydrogen. In the near term (perhaps for

the next 20 years), much of the hydrogen will be generated from fuels like natural

gas and gasoline. To convert natural gas or gasoline into hydrogen pure enough for

fuel cells requires rather elaborate chemical processes involving catalysts. (A catalyst is a material that by its presence helps chemical reactions to proceed more easily.) To deal with different fuel qualities and compositions available in different

parts of the country, better and more durable catalysts are needed than are presently available. The discovery of these new catalysts will require major advances in

materials synthesis, surface science, computational chemistry, and reactor engineering. At the University of Michigan, we have a Department of Energy-funded research program to develop better performing gasoline fuel processors to make pure

hydrogen for fuel cells. We are working to find ways to decrease the size and weight

of the fuel processor system by more than half to make it small enough to fit into

fuel cell powered passenger cars. This goal can only be reached by developing new

catalysts that are at least twice as good as the best catalysts available today, and

coming up with innovative system designs. (A list of energy-related research going

on at the University of Michigan is provided in the appendix.)

The alternative to processing fuels is making hydrogen from water, which is in

abundant supply on the planet. You may remember your high school teacher doing

an experiment called ‘‘electrolysis’’, where electricity is used to split water into hydrogen and oxygen. Lighting the gas bubbles coming out of the water produced a

nice bang. In the long-term future, when our oil supplies start to dwindle, splitting

of water may become important. To split water requires the expenditure of energy

upfront and, currently, is not economical on a large scale. Major advances in technology may make this process economically more attractive. We need to work on

more efficient methods to harness solar, wind, tidal, nuclear, and geothermal energy, new photocatalytic and photovoltaic materials, and improved thermochemical

or biological processes. Thermochemical water splitting can be achieved using the

heat from advanced nuclear reactors, but more research will be needed to fully develop these methods. It seems prudent to start now, while we can still count on fossil fuel supplies, on a coordinated research and development program in water-based

hydrogen generation. Water, most likely, will become our long-term source for clean,

large-scale hydrogen production.

Further, while these and other technical issues need to be addressed, one must

also take into consideration the existing economic infrastructure. The U.S. has an

enormous investment in hydrocarbon infrastructure, from oil refineries to local gas

stations. We must find a way to use the existing hydrocarbon-based infrastructure

to transition within the next couple of decades to a hydrogen economy. However, as

long as we produce hydrogen from fossil fuels, we are still emitting carbon dioxide

into the environment. In essence, we would simply shift the environmental pollution

problem to a different location, without really solving it. One possible solution to

this problem could come from research into carbon dioxide capture and sequestration, which becomes a more realistic option in larger-scale, centralized fuel processing and hydrogen production facilities.

Hydrogen storage

Once we have figured out how to make hydrogen in an efficient and economical

way, the next question is how do we store and distribute it? Finding safe and economical ways to store hydrogen is arguably the key to the commercialization of fuel

cell powered cars. Hydrogen can be stored as compressed gas, or as cryogenic liquid.

It can also be stored or adsorbed in solid materials, such as carbon or hydride materials. However, none of the currently available methods is adequate for our technical

needs. While some progress has been made over the last decade, the best hydrogen

storage materials known today weigh at least twenty times more than the hydrogen

they are storing. In contrast, a typical gasoline tank in a car weighs only a fraction

of the weight of the gasoline inside. There is tremendous opportunity in developing

new materials with larger hydrogen storage capacities. For example, at the University of Michigan, carbon nanotubes, graphite nanofibers, and new metal-organic

74

framework (MOF) materials which show promise for hydrogen storage are under development. However, to bring the storage capacity to technically acceptable levels

will require a great deal of fundamental research. To develop practical solid-state

hydrogen storage materials requires a much better fundamental understanding of

the storage mechanisms, materials properties, and synthesis and manufacturing

methods.

Hydrogen utilization

Hydrogen is attractive, since it can be efficiently and cleanly converted to electrical and thermal energy. One of the reasons for making and storing hydrogen in

large quantities is that we want to use it to power fuel cell stacks. A reasonable

characterization of hydrogen fuel cell technology is that many of the engineering

issues have already been solved. There are several different types of fuel cells in

existence, classified according to the type of membrane material used. The operational temperature range of each of the fuel cell types is limited by the type of material used in the membrane. You are hearing about practical applications in this

hearing. However, major obstacles remain. Many unsolved fundamental research

problems are in front of us, falling into the broad range of materials science, electrochemistry, and electrode catalysis. Current fuel cells are very expensive, but have

problems with durability. For example, we expect a typical household appliance to

last for many years without maintenance. Unfortunately, most of today’s fuel cell

stacks do not even come close to this expectation of reliability, primarily due to materials limitations. The catalysts on the electrodes are very sensitive to impurities

in the hydrogen. The fuel cell membranes, depending on type, have their own, inherent weaknesses limiting their useful life. Fuel cell stacks pose challenging sealing

problems. Hydrogen has a tendency to leak through most materials. These challenges represent a significant opportunity for materials and catalysis research. At

the University of Michigan, we are working on several of these materials challenges,

to develop a better understanding of failure mechanisms, and to come up with better

membrane materials and electrode catalysts.

Besides use in fuel cells, hydrogen can be burnt in internal combustion engines.

However, since hydrogen has properties quite different from gasoline or diesel fuel,

more research is needed to better understand how hydrogen behaves under engine

operating conditions. The University of Michigan has one of the largest automotive

engineering research centers in the country and is conducting research on the utilization of hydrogen in combustion engines. Laying the research foundation for using

hydrogen in today’s transportation systems is extremely important because so many

jobs and industries are dependent upon these systems. Use of hydrogen in internal

combustion engines may, in my opinion, facilitate the evolution to a hydrogen economy.

Given these formidable research challenges, I submit that the verdict is still out

which of the many energy utilization technologies (internal combustion, fuel cells,

batteries, or hybrids) will power stationary or mobile systems in the future.

A PROPOSED UNIVERSITY-BASED ENERGY RESEARCH INITIATIVE

We believe that today we have a tremendous opportunity, even a responsibility,

to leverage the country’s research universities in partnership with industry and government to overcome the obstacles to achieving a robust and sustainable hydrogen

economy. What is needed is a university energy research initiative specifically created to capitalize on the energy research expertise residing in our Nation’s universities. This initiative should be on par with such national science and technology

initiatives as the National Nanotechnology Initiative and Information Technology

Research Initiative. It is easily as important as these initiatives and, I would argue,

more important. While the DOE, the DOD and the NSF all have some programs

to support individual or groups of university investigators, there is no strategically

coordinated national initiative in place that engages the country’s research universities in the transition to a hydrogen energy economy.

I propose that a university-based Energy Research Initiative (ERI) be established

at either the National Science Foundation or the Department of Energy. The primary focus of the ERI would be hydrogen-based energy systems. Regardless of the

federal agency home, basic research funds from all of the federal agencies promoting

energy research should be used to supplement the program. The Energy Research

Initiative would competitively select a group of 6-10 universities across the country

to undertake an integrated set of basic research and education projects focusing on

energy issues. Each center would work in partnership with industry and government.

It is extremely important that promising developments and technologies move

quickly to implementation. To promote this, we propose that ERI basic research acVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
75

tivity be supplemented by ‘‘technology accelerator’’ seed funding to encourage small

businesses, in partnership with universities, to further develop promising technologies. Large companies could also play a role in this but would be asked to cost

share their role in the activity.

Finally, states can play a role as well by augmenting the federal funding for the

ERI with a state-funded economic development program that would support the development of small energy-focused businesses and facilitate their linkage to larger

companies within the state.

I would recommend that $10M in federal funding be allocated to support each of

the centers on an annual basis. Approximate breakdown would be: $8M for basic

research and education, $2M for technology accelerator projects (not including any

state contributions). Taking an approach similar to the National Science Foundation

Engineering Research Center program, each Center could be funded for a five-year

period with an additional five-year renewal based upon performance.

I strongly believe that a university-based Energy Research Initiative that broadly

focuses on the Nation’s energy research and education needs will provide significant

leveraging of federal research dollars. Basic research carried out in research universities provides the foundation for the research, development, and engineering continuum. Importantly, it facilitates technology transfer by moving new discoveries

and innovations from the laboratory to the market place, and encouraging industry

partnerships to develop promising technologies. For our Nation, it is of critical strategic and economic importance that the academic, industrial, and government sector

work together to assure that we lay a strong research foundation, permitting us to

select the best pathways and technologies leading to our hydrogen-based energy future.

Appendix

SELECTED ENERGY-RELATED RESEARCH PROGRAMS AT THE UNIVERSITY OF MICHIGAN

1. FUEL PROCESSORS FOR PROTON EXCHANGE MEMBRANE FUEL CELLS

2. ADVANCED CATALYSTS FOR HYDROGEN GENERATION

3. THERMAL TRANSIENT RESPONSE OF PROTON EXCHANGE MEMBRANE FUEL

CELLS

4. MICRO-FUEL CELLS AND NOVEL ELECTROCATALYSTS

5. COORDINATION OF HYDROGEN AND AIR FLOW FOR TRANSIENT CELL LOADING

6. SYSTEMATIC DESIGN OF PORE SIZE & FUNCTIONALITY FOR METHANE AND HYDROGEN STORAGE APPLICATIONS IN FUEL CELLS

7. DEVELOPMENT OF HYDROGEN INFRASTRUCTURE FOR FUEL CELL VEHICLES

8. MICROELECTRONIC GAS SENSORS AND GAS STORAGE MICRO-RESERVOIRS

9. HYDROGEN STORAGE IN CARBON NANOTUBES AND CARBON NANOFIBERS

10. HOMOGENEOUS CHARGE COMPRESSION IGNITION (HCCI) ENGINE RESEARCH

CONSORTIUM

11. SIMULATION-BASED DESIGN AND DEMONSTRATION OF NEXT GENERATION, ADVANCED DIESEL TECHNOLOGY

12. ADVANCED HYBRID PROPULSION SYSTEM COMPONENT MODELING AND

POWERTRAIN INTEGRATION

13. DEVELOPMENT OF A PRESSURE REACTIVE PISTON FOR IMPROVED FUEL EFFICIENCY AND REDUCED EMISSIONS IN SI AND CIDI ENGINES

14. ADVANCED BATTERY SYSTEMS AND MODELING FOR HYBRID ELECTRIC VEHICLES

15. HYBRID ELECTRIC VEHICLE SYSTEM DESIGN OPTIMIZATION

16. POROUS NANO- AND MICRO-ARCHITECTURED MATERIALS: BATTERY APPLICATIONS

17. SAFETY ISSUES FOR HIGH POWER LI ION BATTERY ANODES

18. THE UNIVERSITY OF MICHIGAN CENTER FOR INDUSTRIAL ENERGY AND ENVIRONMENTAL ANALYSIS

19. IMPROVING PLATE GLASS QUENCHING TECHNOLOGY TO SAVE ENERGY

20. DEVELOPMENT OF A HIGHLY PREHEATED COMBUSTION AIR SYSTEM WITHWITHOUT OXYGEN ENRICHMENT FOR METAL PROCESSING FURNACES TO SIGNIFICANTLY IMPROVE ENERGY EFFICIENCY AND REDUCE EMISSIONS

Mr. BARTON. Thank you, sir. And I want to thank the panelists

for your excellent testimony. This really gives us kind of a breadth

of analysis about where the research is and where the industry is.

The Chair is going to recognize himself for the first 5-minute

questions.

I want to go to you, Dr. Samuelsen. You mentioned that your

fourth point was somewhat revolutionary, some sort of a hybrid hydrogen turbine that had efficiencies, if I understood correctly, of

76

about 75 percent. Can you compare that to a combined cycle natural gas turbine today, what the efficiencies are?

Mr. SAMUELSEN. Mr. Chairman, the combined cycle would be approaching 50, 55 percent. So it is a jump of 20 percentage points,

20, 25 percentage points.

Mr. BARTON. And would that be the same application that this

research turbine that you have talked about would compete in the

large base station powerplant generation sector?

Mr. SAMUELSEN. It would be the same application in the center

power. But in addition to that, it also has a very substantial application in the distributed generation market, the 100 kilowatts to 50

megawatt arena as well—a broader application.

Mr. BARTON. Okay. Mr. McCormick and Mr. Preli, you all were

pretty optimistic. You all were kind of ‘‘pedal to the medal, gungho, let us go for it.’’ But Mr. Vesey was a little more ‘‘we ain’t making any money, and we don’t think we are going to get into this

if we can’t make some money.’’ So what do you two guys need to

do to Mr. Vesey to get him to show a little more enthusiasm for

this program?

Mr. PRELI. I think maybe our enthusiasm stems from the fact

that we have been working on this for 40 years, many times alone.

And now there is a much larger effort—in fact, much of it is outside of the United States, and perhaps now is the timing between

the technology that is being pulled by the automotive industry that

also has applicability in other areas like stationary and fleet applications.

So I think we are optimistic, because with so many people working on it, and so much investment going into it, progress will be

made. Key issues, however, remain I think as we both pointed out.

And that is, if you are moving toward a hydrogen economy, you

need to have the hydrogen. And perhaps that is where some of this

optimism needs to be tempered, because even if the technology is

there, and even if the cost comes down, if you need to operate on

hydrogen, then you still need to stimulate that and have hydrogen

in your economy.

What I will add, though, is that the first applications using stationary powerplants, which have been in service now for over 10

years, run directly on natural gas. You get around that infrastructure problem. You trade some of the powerplant efficiency, but you

don’t need the hydrogen. You can run them right on natural gas.

You convert it right inside the fuel cell powerplant.

Mr. BARTON. Mr. McCormick, what do we need to do to make it

possible for Mr. Vesey to make some money so that they will make

the investments to create the hydrogen?

Mr. MCCORMICK. Well, a couple of general comments. As I mentioned, the progress on the fuel cell and propulsion technology is

extraordinary. But very importantly, this notion that we can build

vehicles that consumers will want to buy. And I think any prudent

car company or any prudent fuel company ought to pay attention

to the consumers, No. 1. And I think we are convinced that we will

be able to do that.

But the second thing—and I don’t want to speak for

ChevronTexaco or the energy companies—but there is a huge

amount of capital that has to be mobilized in order to make this

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transition. We are faced between us with this chicken and egg

issue that if we put the vehicles out there, is there an infrastructure? Or, conversely, if the infrastructure is there, will the vehicles

be there?

Particularly in the infrastructure issue, a lot of the cost of hydrogen that you have heard described today is attributable to return

on capital. And so the issue of how actually capital is made available and how there is taxation or policies around that will be crucial, I think, to this transition.

Mr. BARTON. Mr. Vesey, do you want to comment on that?

Mr. VESEY. Well, I didn’t mean to come across as not optimistic

on this, Mr. Chairman. What we have done is, in focusing on the

business aspects of this, we have looked at alternative business

models that might make this space attractive.

So I think one of the ones you have heard some reference to here

that we are very supportive of is a dual use, so to speak, of the hydrogen, where you have either a fleet, that you are also powering

a fleet as well as filling some vehicles on the side, or whether you

are providing distributed generated power, and then also fueling

vehicles at the same location.

So we are very excited about the space, but are very focused on

proper business models for that.

Mr. BARTON. Okay. Dr. Preli, who else is involved in this technology in terms of creating and manufacturing the fuel cells? Who

is our international competition?

Mr. PRELI. I think internationally it depends upon what market

you are talking about. But in the small residential size, I think the

major competition is coming from Japanese companies. There is a

large effort in Japan to develop small systems. I think in fleet applications our No. 1 competition may be from Europe where they

have a very large demonstration program looking at 30 buses in

the near term in European cities.

And then, in automotive, Japanese car companies like Toyota are

developing their own technology. In the United States, GM and

ourselves are developing technology for automotive. In Europe,

DaimlerChrylser is one of the leaders.

Mr. BARTON. Okay. My time has expired.

The gentleman from Maryland.

Mr. WYNN. Thank you, Mr. Chairman.

There seems to be a consensus that one of the first stops along

this pathway is stationary fuel cells. Is that the consensus? What

does the government need to do to facilitate the expansion of stationary fuel cells?

Mr. MCCORMICK. One of the issues with stationary fuel cells is

they are, by and large, not big multi-megawatt baseload machines.

They don’t replace a nuclear powerplant, for example. And so when

we go to place those distributed generation units, we have to start

thinking about interconnection standards.

And one of the issues is: how do you get the distributed generation systems put on the grid in various locations? And it turns out

that the decisions around that are all local with public utility commissions and things. And so as we talk about rolling this technology out, we face an uncertain market, at least in the United

States, because we are at the whims of each local community. That

78

is not necessarily true in Japan where they are actually uniform

in those codes.

Mr. WYNN. Could you send me something on that? Just a brief

statement of that particular issue——

Mr. MCCORMICK. Absolutely.

Mr. WYNN. [continuing] to help us with it. Now, there seemed to

be less agreement about whether the next step should be fleet vehicles in terms of buses, if I am understanding you right, versus light

trucks. Is there a difference of opinion on that subject? I don’t want

to create one if it doesn’t exist, but I have heard some people talking about buses.

I know Ms. Rips was very interested in bus development, but I

also heard maybe light trucks would be better. Mr. Vesey?

Mr. VESEY. Yes. Thank you, Congressman. I really don’t think so.

I think it is that you have enough vehicles that when you are generating the supply of hydrogen there is adequate use. So the term

‘‘fleet’’ could be buses, it could be light-duty vehicles. From our

standpoint, it is that there is enough to use the hydrogen on a

daily basis.

Mr. WYNN. To what extent would a government fleet commitment, either trucks or buses or vehicles, passenger vehicles, facilitate the commercial growth? Mr. McCormick?

Mr. MCCORMICK. I think it is very, very important. What we

don’t want is demonstrations that leave no legacy. What we want

are real commercial transactions where, in fact, we sell something.

And most importantly, when we prepare those fleets, pick it in

places where the infrastructure grows naturally. So some of the

post office kinds of initiatives, the right selection of some DOD initiatives, would be very good, but there may well be others.

What we want to do is pick the application to make sure that

there is public refueling involved in that application, and then you

get the dual leverage. The people can invest in the fueling station

knowing that there is going to be usage.

Mr. WYNN. So the public refueling would be the key there?

Mr. MCCORMICK. Yes.

Mr. WYNN. Okay. Now, I was looking at a piece from something

called India Car that said that Ford is getting ready to sell 50,000

units of passenger vehicles to Germany by the year 2010. Could

anyone respond to that? Is that likely to happen, or is that specious?

Fleet News reports that Ford is planning to sell a mass-produced

hydrogen fuel cell vehicle in the German fleet market. The reports

says that from 2010 Ford believes it will be manufacturing at least

50,000 units of the vehicle per annum. Dr. Franz Martin Dubbell,

Ford’s Vehicle Alternative Power Trains Market Manager, told

Fleet News at a media briefing and auction that Ford is planning

to run its first vehicles with small fleets in Germany and California

in 2004, with full launch slated for 2010.

Is this smoke, or is this real? Coming from the competitors.

Mr. MCCORMICK. Well, I certainly wouldn’t want to speak for

Ford, but I think those are not unrealistic kinds of numbers. One

of the things when we think about where vehicles are launched

worldwide, and I think this is very important to the discussion, we

have to think about——

79

Mr. BARTON. Look around at the audience. They are smiling

right now.

Mr. MCCORMICK. We really have to think about where internationally are the codes and standards and the infrastructure

going to happen. And so it may well be Europe, it may well be

Japan, it may well be the United States. And I think we have to

see how that develops.

Mr. WYNN. With respect to codes and standards, because several

witnesses mentioned it as well as Dr. Garman, can the industry

help us—well, I know there is a self-regulation concept that is

sometimes called into question. But can they at least get us started

on the format or the template, if you will, rough template or draft

template or something relative to codes and standards, so that the

committee could begin to look at that issue in more detail and provide us with the input?

Mr. VESEY. Yes, sir. I think the hydrogen roadmap that Mr.

Garman referred to, codes and standards was a big piece of that,

and the industry is working very closely with the DOE to get the

proper codes and standards started.

Mr. WYNN. Okay. Would you submit that to this committee as

well?

Mr. VESEY. Certainly.

Mr. WYNN. Okay. Thank you.

My time is up. Thank you.

Mr. BARTON. The gentlelady from California.

Ms. BONO. Thank you, Mr. Chairman. Mr. Chairman, I actually

had the opportunity to drive a fuel cell bus, and it was a scary moment, not for me as much as for everybody else on the road I think

at that time. But I want to thank, again, SunLine for being such

a leader in all of these future technologies.

But my questions for Catherine really comes—or Ms. Rips, excuse me—I have known her way too long. People think of the

desert, they think of all of our windmills and our solar capabilities.

Can you explain a little bit how much solar and wind you are currently using in the production of your hydrogen?

Ms. RIPS. Yes. Thank you for the question. We have been generating hydrogen using solar power for the last 3 years at SunLine.

We are currently using it to power an electrolyzer. I know Mr.

Garman was talking about that as an option earlier, and I think

that probably the biggest deterrent to the use of that technology is

just the cost of it.

And so, you know, there is a school of thought that if there was

simply more orders placed for those kinds of systems that the cost

would come down. So I know you had asked what the government

could do to help, and perhaps being a purchaser of those systems

might be something that would work.

We are also involved in a wind project. The desert does have a

lot of wind generation. The wind belt is the Banning Pass there.

And we are working with South Coast Air Quality Management

District and some other partners to do a project that should come

online in a couple of months where we will be using power directly

off of a wind turbine to generate hydrogen from an electrolyzer.

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So we will have a much better idea of what the relative costs are

once that project is operating. But that, of course, would be the end

goal.

Ms. BONO. Thank you. When I drove the bus, I had an interesting question, too, and perhaps it is an offshoot of the direct hydrogen question. But when you deploy a bus that is a million dollar

bus or so, how does the public feel about these buses being on the

street? What has their reaction been, other than my driving?

And is the insurance—I mean, how does the insurance model

work when suddenly there is a liability factor? And if somebody

were to take out one of these million dollar buses, can you explain

to me how I guess the integration with the public is going to run

with that on the street?

Ms. RIPS. Okay. Well, we think that it is very important to bring

the public along in any conversion to an alternate fuel. So we really

stress education and outreach and do activities that put our vehicles out into the community, so that people can get used to them.

And we did definitely publicize the fuel cell bus and let people

know that it was going to be out on the street.

Prior to it actually going into revenue service, we had a different

fuel bus out there just for a short time. And when we advertised

it, people literally lined up to ride it. They were so excited about

it. And we had comments constantly from our riders. We put the

thunder power bus that Congresswoman Bono is referring to in

revenue service for over 3 months, and passengers would call us

and talk to the drivers about it and actual call the switchboard.

And they are very impressed with it.

We used the opportunity to educate them about the benefits of

it, because we feel that, you know, one of the things that transit

does is give you basically a mobile billboard for the technology. And

by using the outside of the bus, and also by using the inside panels

on it, you have an opportunity to educate a captive audience and

let them know what the benefits of hydrogen fuel cell technology

are.

And what we have found is that the more you educate them, the

more they appreciate what you are doing for the environment and

also for their health. So it is a great vehicle to educate while it is

actually transporting people.

Ms. BONO. Thank you.

Dr. Samuelsen, also, can you explain a little bit—again, the safety factor still I think rides on people’s minds when you talk about

hydrogen. But are hydrogen fuel cell vehicles able to drive through

tunnels currently?

Mr. SAMUELSEN. They are indeed able to drive through the tunnels currently. But it is in the absence of any regulation to prohibit

them from doing that.

The area where perhaps there is the largest challenge in the

safety aspect—I think Assistant Secretary Garman addressed the

safety aspects very well in terms of the diffusivity of the hydrogen

relative to gasoline and the relative more safe conditions of being

able to operate a hydrogen car compared to a gasoline car. But he

also——

Ms. BONO. So the garaging of this vehicle is going to be the same

as we have today?

81

Mr. SAMUELSEN. Well, that is the point I wanted to get to. There

was a Congressman who referred to the NASA incident, and Assistant Secretary Garman referred to it probably being an enclosed

space. And we do have, with public use, enclosed spaces—our garage, public parking structures, and other private parking structures.

How those are established with appropriate sensing, if that is

what is needed, appropriate ventilation, if that is what is needed,

has not been addressed and will need to be because certainly we

want to be able to garage our car as we do today with our gasoline

car.

Today we put a car into the garage with 20 gallons of gasoline,

have natural gas flames about with the clothes dryer, the water

heater as examples, and we need to evolve from that experience

and confidence in safety with the current infrastructure to one that

equals that with hydrogen as well.

Ms. BONO. Thank you. I asked that question the other day. I was

at a parking structure over by the Pentagon, and there was a car

fire two levels down. And so you kind of really have to ask the

question.

But I know that my time has expired. So thank you, Mr. Chairman. Keep going?

Mr. BARTON. You can keep going. You didn’t questions the first

round, so——

Ms. BONO. Well, thank you. I have got to go through my list.

Back to Ms. Rips, then, you were among the first public transit

agencies to convert your fleet entirely to natural gas. Do you see

the conversion of other agencies going as smoothly as yours did and

as timely?

Ms. RIPS. I am sorry. Could you say the last part of that again?

Ms. BONO. You see, say when we do move to fuel cell entirely to

your bus fleet—in the future, obviously—do you see the conversion

going as well as other companies have followed with natural gas?

Ms. RIPS. Well, that is a very good question. And, you know, as

I mentioned in my statement, we think that training has everything to do with how the conversion process goes. So when we converted to natural gas, we had actually trained every person on our

staff, including the receptionist, I mean everybody, as far as the

properties of natural gas and the benefits of it and the different

things that they had to be aware of.

We have done the same thing with hydrogen. We actually had

the Schatz Energy Research Center at Humboldt State University

come down and put on a series of seminars for everybody at our

transit agency and our board members to educate them. We have

worked with a number of partners, including a university system

and our community college, to create the first curriculum for hydrogen fuel cells and related technologies.

And we think that if people are properly trained and make a

commitment to training and participate in the education process,

we would like to see this ideally start at the high school level and

go through community college and college-level courses, so that

technicians are trained, that there is a skilled workforce in place.

We don’t think that there will be any problems that are not fairly

easily solved.

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And I am sorry, I didn’t answer your question about insurance.

Liability insurance is definitely an issue that needs to be resolved.

Like the codes and standards, it is different everywhere. And we

were able to cover you on our policy, so you were safe driving. But

it is definitely an issue that needs to be looked at.

Ms. BONO. Thank you. I yield back, Mr. Chairman.

Mr. BARTON. We are now going to just have some wrap-up questions. And all members that wish to—we are not going to put the

clock on. I have got two or three questions, and I think Congressman Wynn may, and Congresswoman Bono.

Ms. Rips, you obviously—your community has put a lot into this

program. But when Congresswoman Bono was talking about the

million dollar bus, there are not many communities that would

have public transit that could afford to put into service million dollar buses if they have to even come close to breaking even.

So, I mean, again, your community is to be commended for taking the lead, but I would think that you are a fairly affluent community, somewhat above the national average in income levels, and

probably above the national average in willingness to bear an extra

burden to show progress on the environmental front. Is that correct

or incorrect?

Ms. RIPS. Well, actually, it is an interesting community. There

are nine cities in the Coachella Valley and several unincorporated

areas. And while we do have a couple of cities that among the

wealthiest in the United States, we also have several communities

that are among the poorest.

We have really an inordinate number of very poor residents, unfortunately. So it is true, and it is not true. I think that what you

are seeing in the Coachella Valley is really commendable political

leadership, and it is nothing but the leadership of our elected officials that caused our transition.

And it was their commitment to the program and their desire to

see a clean environment——

Mr. BARTON. Well, what kind of, in the best case, profit do you

make? Or, in the worst case, how deep is the deficit?

Ms. RIPS. Well, let us say that we look forward to the day when

the buses only cost a million dollars. That was really—that is low

for what they are costing these days. But, you know, as UTC pointed out, the cost of that technology is coming down. And we realize

that—we are working with the FTA on some things, and their goal

is to see—because of the increased efficiency in a fuel cell bus, their

definition of commercialization is when a fuel cell bus costs twice

what, for instance, a natural gas bus would cost. That would bring

the cost down to about—or to a diesel bus. That would bring it

down to about $600,000. So——

Mr. BARTON. And compare that to—what does a natural gas bus

or a diesel bus cost today?

Ms. RIPS. About $300,000. So they are saying if a fuel cell bus

costs $600,000 that—because of the increased efficiency it would be

considered equal.

The community has put a lot into it. We think that there are a

couple of more generations of technology, of R&D on the technology, needed to get it down to the point where it is compatible

on a cost basis. And that is the reason why we advocate a limited

83

number of demonstration projects with multiple generations,

because——

Mr. BARTON. I am very positive I don’t want——

Ms. RIPS. [continuing] we clearly believe that we will get there.

Mr. BARTON. I am very positive on which you are doing. I just—

I am not sure that my community of Ennis, Texas, would be willing

to take the intangible satisfaction as opposed to the less intangible

but more taxpayer-friendly existing technology that is available

today. So——

Ms. RIPS. Well, and I think that is exactly the point, that the

technology is not suited for every application at this point in time.

And what we are trying to do is help it get to the point where it

is. If we are successful in our efforts and working with our partners, you know, in perhaps 10 years it will be affordable for Ennis,

Texas.

Mr. BARTON. Yes. Thank you.

Dr. Samuelsen? And then I have a question for Dr. Schwank.

Mr. SAMUELSEN. I just wanted to comment that I think one looks

to mass volume production to bring down the price at some point

in time. But what is not fully appreciated is the strategy among

many manufacturers—and Mr. McCormick alluded to this with respect to using automobile technology and distributed generation—

but it is also to use automobile technology in the outfitting of the

bus with the fuel cell stack.

So you will see fuel cell buses evolving that basically are operating on two automobile fuel cell stacks benefiting on the mass production that will eventually result and have this commonality between the automobile application and the bus application, rather

than thinking of them as separate, distinct applications.

Mr. BARTON. Okay. And, Dr. Schwank, you talked about a university-based research component, 6 to 10 universities around the

country. Is there any formal organization that has been developed

among the universities, the research universities, to do that, or is

that just a concept that you wanted to put on the table?

Mr. SCHWANK. Thank you, Mr. Chairman. Our proposal recognizes that the task before us is enormous. I would compare it in

terms of technological challenge almost to the moon shots. We have

an incredible talent pool in our universities, but universities—the

university research is not coordinated so that you can bring the

powerful synergism together.

The coordination of this has to be done by bringing together a

partnership of the industrial sector, the government sector, and the

academic community. We would be happy to provide an initial

blueprint, some first draft, for further discussion, and then invite

industry and government into—work on this and shape it. I think

the task is too big for one individual constituency to do it all by

themselves.

Mr. BARTON. Well, we would appreciate that. Just be sure that

University of Maryland and Texas A&M University and University

of California at Palm Springs are included in the discussion phase.

Mr. SCHWANK. We will certainly take it into advisement.

Mr. BARTON. This is my last question, and then if any other

members have a question.

84

Mr. McCormick, what is the best case timeline—the Ford Motor

Company people apparently have issued a press release that they

are going to sell 50,000 hydrogen cars in Europe by the year 2010.

I have been out to Detroit. I have been to your test facility several

years ago with the Vice President.

If everything that could go right did go right, you know, how

soon does General Motors see a retail vehicle, a consumer vehicle,

that is available in the showrooms around the country?

Mr. MCCORMICK. Well, I think we in Ford, and actually most of

the auto companies, are looking at that 2010 date. A combination

of a couple of reasons. We think the technology is moving at that

kind of a rate that justifies looking at that date. And quite honestly, if we are not talking about a date like that, then probably

as a business I am spending too much money on it.

So we have to see it getting into the field in that 2010 to 2015

timeframe to sustain the kind of investment that we are putting

into it.

Mr. BARTON. So we are talking about let us get moving right

now. And finally—I said that was the last question—but, Mr.

Vesey, when you were in my office you talked about the need to

develop a technology for onboard storage of hydrogen that wasn’t

yet in existence. And you talked about your best case was some

sort of, if I understood you correctly, a solid-state storage model.

Could you very briefly elaborate on that?

Mr. VESEY. Yes. All it was referring to—the current technologies

are high compressed gas form or liquid, which is at a very cold

temperature. And there are experiments going away with metal hydrides, which if you can get the weight percent up to where it will

give the vehicle a proper range it is not high pressure and it is ambient temperature. So it is a little more palatable from a consumer

standpoint.

Mr. BARTON. And is that something that we need to encourage

the Federal Government to invest more research dollars in, perhaps through Dr. Schwank’s university-based research program?

Mr. VESEY. I think we would all agree that storage is the key

issue here, and any recommendations in helping those technologies

would be good.

Mr. BARTON. Okay. Congresswoman Bono or Congressman

Wynn, any final comments? Either one of you?

Ms. BONO. Just one, Mr. Chairman, just to help my friend out.

When you mentioned the wealthy, affluent Palm Springs area, our

No. 1 industry is actually agriculture, and people believe it is a

much different district than it is. And I know you have talked

about coming out to visit, and I want to reextend my invitation for

you to come out and——

Mr. BARTON. We are working on that.

Ms. BONO. Thank you. I know that you are.

Mr. BARTON. I am looking forward to it, actually.

Ms. BONO. I look forward to your visit. And with that, I yield

back my time. Thank you.

Mr. BARTON. Mr. Wynn?

Mr. WYNN. Mr. Chairman, I just want to thank you again for

putting this hearing together. I learned a great deal. I also want

85

to thank you for your support for the University of Maryland. That

is duly noted.

Thank all of the members of the panel. I will be contacting you

individually, because I do have a couple other questions.

Thank you, Mr. Chairman.

Mr. BARTON. We, again, appreciate this panel. There may be

written questions for the record. We hope that you will reply expeditiously. We appreciate your time and testimony and look forward

to working with you.

This hearing is adjourned.

[Whereupon, at 12:45 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

PREPARED STATEMENT OF THE AMERICAN PETROLEUM INSTITUTE

The U.S. oil and natural gas industry is committed to meeting the nation’s future

transportation fuel needs. Since its beginning, the industry has been in a constant

state of change, working to better serve its customers and a growing nation. Relying

heavily on advanced technology, the industry has provided improved products to

Americans with a steadily reduced impact on the environment, and we will maintain this commitment in the future.

We believe that competition and the resulting push to innovate will mean that

our children and grandchildren will be driving vehicles using fuels that, together,

are safer, cleaner, and more efficient than ever. These improved cars and trucks

may well be propelled by something other than today’s internal combustion engine,

whether it is an advanced version of that engine or electric hybrids or fuel cell vehicles. We believe the 21st century will be an exciting new era for personal transportation.

While we expect conventional hydrocarbon fuels will remain the dominant energy

source, at least through the mid-century, the oil and natural gas industry is committed to providing the fuels for the nation’s transportation needs regardless of the

fuel type. Future automobiles may be based on a variety of advanced technology engine-fuel systems, including hydrogen-powered fuel cells. At least initially, all of

these systems will likely rely heavily on hydrocarbon fuels either directly or indirectly. These advanced fuel/vehicle systems should be allowed to compete with each

other in the marketplace and on a level playing field.

The Role of Hydrogen in Meeting Transportation Needs

The American Petroleum Institute appreciates this opportunity to present the

views of its member companies on the role of hydrogen in meeting the transportation needs of American consumers.

In his State of the Union Address, President Bush announced a Hydrogen Initiative to hasten the development of hydrogen-powered fuel cells in motor vehicles. API

believes that fuel cell vehicles are an exciting new technology that could figure

prominently in America’s transportation and energy future.

As we understand the program, the Hydrogen Initiative will focus on pre-competitive research aimed at advancing the technology to produce, store, distribute, and

deliver hydrogen for use in fuel cell vehicles and electricity generation. The Administration has indicated that the Hydrogen Initiative will complement the

FreedomCAR initiative, which supports pre-competitive research in advanced automotive technologies for the mass production of a full range of affordable vehicles,

including fuel cell vehicles.

At the outset, we must all recognize that development of hydrogen as a viable

transportation fuel source will take time. The U.S. Department of Energy’s National

Hydrogen Energy Vision and Roadmap reports envision a path for hydrogen development that would span between three and four decades. It is important to keep

this timeframe in mind and recognize that hydrogen research will require a longterm commitment. We should also recognize that major technological breakthroughs

are required before hydrogen can become a viable fuel source.

The increased national interest in hydrogen as a transportation fuel is understandable. Hydrogen exists in nearly unlimited abundance and, when used in a fuel

cell vehicle, generates zero emissions. However, it should be noted that hydrogen

only exists in combination with other chemical elements, and significant energy and

costs are required to produce, store, distribute and deliver hydrogen for use in fuelcell vehicles.

86

API believes that, in evaluating the pros and cons of any fuel/vehicle system, it

is vital to undertake a ‘‘well-to-wheels’’ analysis of the entire system. The ‘‘well-towheels’’ approach considers energy use and emissions for both ‘‘well-to-tank’’ (i.e.,

production and distribution of the fuel) and ‘‘tank-to-wheels’’ (i.e., use of the fuel in

the vehicle). When using this approach, different fuel/vehicle systems can be analyzed on a comparable basis. The internal combustion engine is the benchmark

against which the progress of emerging advanced fuel/vehicle systems should be

measured.

In considering future transportation fuel needs, there are near- and mid-term options for increasing fuel use efficiency and reducing emissions. Alternatives include

hybrid engine systems—a combination of an electric motor and gasoline or diesel engine—and advanced gasoline and diesel engine technologies. The rate of market

penetration for hybrids will likely depend upon price and performance; however, it

should be recognized that gasoline hybrids are currently in the marketplace and numerous auto manufacturers have announced plans to introduce a variety of additional hybrid models over the next few years. Ongoing research and development

continues to focus on reducing the component cost of hybrids. All of this suggests

that there is substantial promise for hybrid technology playing an important role

in improving efficiency and lowering emissions.

When comparing greenhouse gas emissions on a well-to-wheels basis, a number

of advanced vehicle and fuel options compare favorably with today’s gasoline internal combustion engine. Diesel engines, gasoline and diesel hybrids, on-board gasoline reformer based fuel cells (i.e., systems where hydrogen is produced on-board the

vehicle via extraction from gasoline-like fuels), and fuel cell vehicles powered by hydrogen produced from natural gas all have lower greenhouse gas emissions. In contrast, hydrogen produced via electrolysis of water using electricity from typical U.S.

sources has very high greenhouse gas emissions. Thus, there are a variety of advanced systems that have the potential to lower greenhouse gas emissions, but none

of these systems result in ’zero’ greenhouse gas emissions.

To address the areas mentioned above, API member companies have undertaken

substantial research activity in advanced technologies such as hydrogen production

and storage, combustion fundamentals, exhaust aftertreatment, and improved hydrocarbon-based fuels that enable lower emissions and higher efficiency. Much of

this work is done in close collaboration with automobile and engine manufacturers,

the government and other partners.

Technological Breakthroughs Needed for Hydrogen and Fuel Cell Vehicles to be Viable

Technological breakthroughs are required to reduce fuel cell vehicle costs and to

reduce production, distribution, delivery and storage costs of hydrogen for the system to be competitive against the ever-improving performance of advanced internal

combustion engine and hybrid vehicle systems. Moreover, increased use of hydrogen

as a transportation fuel involves other challenges, including safety, the potential

need for a new distribution infrastructure, and a need for approaches that address

potentially increased emissions due to hydrogen production.

Cost Reduction and CO2 Emissions Need To Be Addressed

Breakthroughs are needed to lower the cost of fuel cells and fuel cell vehicles. For

example, the cost of the fuel cell stack needs to be reduced substantially to compete

with a conventional powertrain. The cost of fuel cells has dropped by about a factor

of 100 over the last 10 years, but automakers say that costs must still be reduced

by more than a factor of 10 for the technology to become competitive.

Like electricity, hydrogen is an energy carrier, not an energy source. To succeed

in the market, hydrogen will need to be produced in large volumes at reasonable

cost. But, without a major breakthrough in production technologies, most hydrogen

would likely continue to be produced from natural gas, the most affordable source

of hydrogen with current technologies. However, the United States is short of indigenous natural gas and, in order to provide large amounts of hydrogen, access to the

potentially large natural gas reserves on government lands and/or imported LNG

will be needed. Hydrogen production is, therefore, an important research area.

If hydrogen were made from natural gas or other fossil fuel sources, then CO2

would also be generated as a by-product. If low greenhouse gas emissions are to be

achieved in that scenario, it would be necessary to separate, capture and store the

CO2 generated (i.e., CO2 sequestration). Thus, breakthrough research focusing on

CO2 separation, capture and storage methods is also important. If, on the other

hand, sufficient electricity could be generated by renewable or nuclear technologies

to make hydrogen from water, then CO2 sequestration technologies would be less

87

important. However, cost reduction breakthroughs in renewable and nuclear technologies would then be needed.

Distribution Infrastructure Issues Need To Be Addressed

Hydrogen distribution could take one of two forms: pipelines or specially designed,

very-low temperature tankers. Currently, high-pressure tankers are limited in their

energy-transporting volume. Because hydrogen has a much lower energy density

than gasoline, it would require 19 hydrogen tankers to carry the energy value of

one gasoline tanker assuming the hydrogen and gasoline tankers were of similar

size. On the other hand, pipelines could move much greater volumes, but existing

natural gas pipelines are not suited for hydrogen and new ones would be required.

Regardless of whether hydrogen is distributed via retrofitted pipelines or new dedicated pipelines, technological issues need to be addressed. For example, leak detection technology is needed which requires research in the sensors and odorants areas.

Breakthroughs in new materials and improvements in automated welding techniques are needed to lower pipeline costs. Improvements in compressor technology

including seals are needed to improve compression efficiency and reduce costs. Improvements in hydrogen liquefaction technology are also needed to lower costs and

increase energy efficiency.

Developing a distribution infrastructure for hydrogen for direct fuel use would be

costly. However, there are alternatives such as using the existing hydrocarbon fuels

infrastructure and extracting the hydrogen with an on-board reforming system or

producing the hydrogen at the retail station. These alternatives would help resolve

safety and infrastructure issues needed for the initial introduction of fuel cell vehicles, provide time to advance breakthrough research, and provide a ’bridge’ to hydrogen should breakthrough research be successful. The on-board gasoline reformer

faces a number of challenges that must be overcome as well. Reducing reformer

start-up time and energy losses are key areas of improvement where R&D is and

needs to be focused.

Safety and Storage Issues Need To Be Addressed

Issues related to hydrogen production and distribution, retail delivery, storage

and vehicle safety must all be addressed and the unique safety challenges should

be addressed through the development of data-based codes and standards. Hydrogen

storage will be needed throughout the entire infrastructure spanning from the production site through the distribution system to the fueling station. Providing sufficient cost effective, bulk storage, which is a method to address supply-demand balance, will require new technology. Hydrogen storage on board vehicles is an area

requiring new materials breakthroughs. Areas of focus include advanced materials

for low-pressure storage, technologies to extend driving ranges and reducing storage

costs.

Looking Ahead

As we move into this new century, the U.S. oil and natural gas industry will continue working with the automotive industry and government to keep improving our

fuels and vehicles. Working together, we have made tremendous progress since the

1970s in reducing emissions and improving fuel economy while maintaining consumer satisfaction. Reduced auto emissions have contributed heavily to the dramatic reductions in overall emissions of major pollutants. Despite a 41 percent increase in energy consumption in that time period, ambient levels of carbon monoxide have been reduced by 28 percent, sulfur dioxide by 39 percent, volatile organic

compounds by 42 percent, and particulate matter by 75 percent. We will accomplish

a great deal more this decade under existing standards of the Clean Air Act as well

as new national vehicle emission and fuel standards that come into effect in 2004

and 2006.

The auto and oil industries have made tremendous progress together over the

years, introducing a range of improved vehicles and enabling fuels to reduce emissions, and increase fuel economy, and performance. We fully expect this trend to

continue and strongly support R&D focused on achieving the full potential of advanced internal combustion engines, hybrids, and advanced fuels. We also recognize

the long-term commitment required for R&D focused on the breakthroughs necessary to enable fuel cell vehicles and hydrogen fuel opportunities.

Moreover, whatever role government plays in fuel cell development, it should be

a broad one. Government should encourage a multi-faceted approach. We believe

that government’s research role should be focused on pre-competitive, breakthrough

research, leaving it to the private sector to build on this research and move the outcomes into the commercial development phase. The government should not prematurely focus on one approach while discouraging other approaches that may have

high potential. Advanced technologies should compete on a level playing field with

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the American consumer ultimately making the choice of which technologies will be

successful.

Our industry wants to work with government and others in the private sector to

evaluate fuel cells and other advanced vehicle fuel systems from a well-to-wheels

perspective. We believe that fuel cells may have an important role to play in the

nation’s transportation fuels future. We also believe that the fuel cell and hydrogen

challenge should be viewed as a system. Each piece of the system, including the primary source of hydrogen, the production, distribution, retail delivery, and storage

of hydrogen and the fuel cell vehicle itself, has challenges that must be overcome

with innovative breakthroughs in order for the system to become competitive. We

should take advantage of, and capture, the benefits of advanced gasoline and diesel

technologies, including hybrid technology, in the near- and mid-term while the challenges of fuel cell and hydrogen technologies are being researched. The U.S. oil and

natural gas industry is committed to playing a leading role in this important national effort.

UNIVERSITY OF MICHIGAN

COLLEGE OF ENGINEERING

July 5, 2003

The Honorable JOE BARTON

Chairman

Subcommittee on Energy and Air Quality

2125 Rayburn House Office Building

Washington, D.C. 20515

Dear CONGRESSMAN BARTON: Thank you for the opportunity to appear before the

Subcommittee on Energy and Air Quality on May 20, 2003 to testify regarding the

hydrogen energy economy.

Enclosed are my responses to questions from the Honorable Christopher Cox. The

basic research initiative blueprint is also submitted in response to a request by the

Committee during Question and Answers to provide a blueprint for a basic research

initiative.

Sincerely,

JOHANNES SCHWANK

Professor of Chemical Engineering

RESPONSE TO QUESTIONS FROM CONGRESSMAN CHRISTOPHER COX

Question 1. If I wanted to start a commercial hydrogen fueling station, what regulatory obstacles might prevent me from opening it?

Question 2. Are hydrogen fuel cell vehicles allowed to drive through tunnels?

What about trucks carrying compressed or liquid hydrogen cargo?

Question 3. Can we trust ordinary people to fuel their own cars at a hydrogen

pump, or do we need specially-trained technicians?

Question 4. Is it safe to park a fuel cell vehicle inside a garage? Why or why not?

What needs to change to make it safe?

Response: The four questions address issues that are related to regulation of hydrogen transport and dispensing as fuel for fuel cell vehicles. The regulation of the

transportation of hydrogen is not my particular area of expertise. I believe that the

definition of standards and regulations is best left to the federal and state agencies

enforcing them and industries most affected by them.

I note that there are still many open questions regarding whether hydrogen

should be generated centrally or on-site, and how to best store hydrogen (e.g. as compressed gas, liquid, or in solid-state storage materials). There are a number of possible alternatives for hydrogen generation, storage, and distribution that need to be

researched and further developed before major decisions on infrastructure deployment can be made. Depending on the chosen hydrogen generation, storage, and distribution infrastructure, appropriate standards and regulations will then need to be

developed. Therefore, it is essential that we not choose winning and losing technologies now. It is too early in the development process to assume that the best alternatives are to use liquid hydrogen centrally produced. Instead, we should focus

our national efforts on exploring the vast array of alternatives.

Thus, a great deal of basic research is still needed to insure that hydrogen energy

can be efficiently used in a safe cost effective manner. This is why there is a pressing need for a national hydrogen energy basic research initiative. One possible approach for initiating and carrying this out is attached.

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A University-Based Hydrogen Energy Research Initiative

Tapping the Nation’s Research Universities to Achieve the Hydrogen Economy

Johannes Schwank, Levi Thompson, Dennis Assanis, and James MacBain,

University of Michigan College of Engineering, Ann Arbor, Michigan

June 24, 2003

Introduction and Overview

During 2002, the six billion people of the world used 13 trillion watts (13

terawatts) of energy. The major portion of this energy came from fossil fuels. By

2050, an estimated 8-10 billion people in the world will require 30 to 50 terawatts

of power to sustain their homes, industries, and transportation systems. Over the

last decades, we have seen a clear trend showing a transition from carbon-rich fossil

fuels such as coal and petroleum to fuels containing less carbon and more hydrogen,

such as natural gas. One of the major drivers for this trend has been the need to

reduce carbon dioxide emissions into the atmosphere. This trend will culminate in

eliminating carbon altogether, and building an economy based on hydrogen as the

primary energy carrier.

The world is on the threshold of entry into a hydrogen economy. To bring this

transition about will require significant technical advances in new materials, processes, and infrastructure. It will also require a significant investment on the part

of government and industry. The consensus in the industrial and academic sectors

is that we must find economically and technically sound ways to produce, store, distribute, and utilize hydrogen. It is critical for the Nation’s economy and its security

that it be the global leader in developing the core technologies to accomplish this.

It is important that we develop a sound scientific and technical foundation, encompassing a wide spectrum of hydrogen-related fundamental and applied research

issues. We must better understand the advantages and disadvantages of all our

technology options before selecting specific technologies. The Nation’s research university system is ideally suited to the task of establishing a sound scientific basis

for developing hydrogen technology. Unfortunately, current federally sponsored research efforts are a patchwork at best. There is no coordinated federal research program in place that engages U.S. universities to address hydrogen energy issues. Although some universities receive federal support for research projects that address

some aspects of hydrogen-based energy research, the scope and scale of the federal

effort to tackle the important technical challenges is sorely inadequate. If we as a

Nation are going to secure our technical leadership position in the world by leading

the transition to a hydrogen economy, we must create a more comprehensive and

coordinated program.

We propose that a Hydrogen Energy Research Initiative be established that effectively engages the intellectual capabilities of the Nation’s universities. The magnitude of such a program should be on par with national science and technology initiatives like the Information Technology Research Initiative or the National

Nanotechnology Initiative. The framework of such an initiative, its organization and

research objectives, are described in the following sections.

The University-based Hydrogen Energy Research Initiative

Approach

We, at the University of Michigan, propose that a university-based Hydrogen Energy Research Initiative or HERI be established at either the National Science

Foundation or the Department of Energy. In either case, basic research funds from

all of the federal agencies promoting energy research should be used to supplement

the program. Using a competitive peer-review process, a group of 8-10 universitybased consortia, in partnership with industry and government, would be selected to

undertake an integrated set of basic research and education projects focusing on the

various components of hydrogen as an energy carrier. Each university center would

execute basic research projects and develop undergraduate and graduate educational programs focusing on hydrogen-based energy technologies. In addition to

scientific and engineering analyses of promising candidate systems, economic, social

and environmental issues would be investigated. This will facilitate benchmarking

of candidate systems and multidisciplinary synergy.

To facilitate the development and adoption of promising technologies, the HERI

would provide supplemental ‘‘technology accelerator’’ seed funding to encourage

technology development by businesses, in partnership with universities. States

should be encouraged to augment technology accelerator programs with state-funded

economic development programs that would further the development of small energy-focused businesses and facilitate their linkage to larger companies within the

state.

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Payoff

A university-based center of excellence program that broadly focuses on the Nation’s energy research and education needs will provide significant leveraging of federal research dollars. Because it is located at the beginning of the research, development and engineering continuum, it avoids the risky practice of picking ‘‘winners

and losers.’’ Importantly, it facilitates technology transfer by encouraging industry

partnerships to develop promising technologies.

Funding

Annual funding of at least of $11M per center would be necessary. An approxi- mate breakdown would be: $8M for basic research and education, $2M for technology accelerator projects, and $1M (nominal state funding) for economic development facilitation. Each Center should receive federal funding for a 5-year period

with an additional 5-year renewal based upon performance. Ideally, the HERI would

support 8-10 such centers, requiring total federal funding of $80-100 million/yr.

HERI Center Activities and Operation

The HERI would provide an ideal platform to bring together academia, industry,

and government to address hydrogen energy basic research issues. The participation

of engineers and scientists from member companies and government agencies on

specific research projects would be strongly encouraged. In brief, each university

center would:

• Focus on precompetitive fundamental hydrogen energy research • Educate and train students and industry practitioners about hydrogen-related

technologies. • Foster technology transfer and economic development by selecting projects based

on technical merit and commercial potential. • Carry out joint research projects in collaboration with industry and government

partners. • Facilitate technology transfer to industry partners. • Provide a forum for engineers, scientists, and business leaders to share ideas and

develop collaboration.

HERI Basic Research Program

Universities would carry out precompetitive fundamental research in areas that

limit the use and adaptation of hydrogen energy technologies. Most projects would

be done in partnership with industry. Hydrogen-based energy systems would be the

primary focus of the research program. Research would be conducted in the general

areas of:

• Hydrogen Generation • Hydrogen Storage • Hydrogen Distribution • Hydrogen Utilization (stationary, mobile, micro) • Business, Market and Economic Issues

Hydrogen is the ideal future energy and power storage/transport medium for the

nation and world. It has high energy density, the ability to be converted to electrical, and thermal energy via highly efficient, non-polluting processes, and the potential of being produced from water, an abundant, renewable natural resource. The

transition from the present hydrocarbon economy to a hydrogen economy is one of

the great challenges of this century and will require significant advances in a number of technical and business areas. In 2002, the National Hydrogen Energy Roadmap Workshop, a meeting of more than 200 representatives from hydrogen energy

industries, academia, environmental organizations, federal and state government

agencies, and national laboratories, identified hydrogen production, delivery, storage, energy conversion, applications, and public education and outreach as the most

important barriers and needs to be addressed in this quest.

Hydrogen Generation. In the near term (perhaps for the next 20 years), hydrogen

will most likely be generated from natural gas or liquid fuels. To convert these fuels

into hydrogen requires elaborate chemical processes carried out in a reactor system

called a ‘‘fuel processor’’. Processing of hydrocarbon fuels inevitably leads to carbon

dioxide as byproduct, in essence only shifting the point where carbon dioxide emission occurs without solving the environmental problem. Nevertheless, given the

massive existing infrastructure for fossil fuels, we need to utilize this infrastructure

to facilitate the gradual transition to a hydrogen economy. The large-scale, industrial production of hydrogen from natural gas or liquid fuels is a technically mature

process, however this process does not properly scale for smaller-scale, distributed

on-site hydrogen generation in gas stations or homes. To realize local hydrogen generation, new types of fuel processors with better catalysts need to be developed. ReVerDate 11-MAY-2000 09:31 Aug 11, 2003 Jkt 000000 PO 00000 Frm 00094 Fmt 6633 Sfmt 6621 F:\DOCS\87487.TXT HCOM1 PsN: HCOM1
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cent advances in the field of catalysis, leveraged by novel tools including

combinatorial catalyst synthesis, high-throughput screening, and computational

chemistry, promise to accelerate the discovery process.

An alternative to fossil fuels is the use of renewable sources such as biomass. The

foremost difficulty in utilizing biomass is its sheer bulk. Transportation to a central

processing facility is prohibitively expensive and limits its use. Finding ways to reduce the size of process equipment would permit its use in mobile systems that

could convert biomass directly in the field to a liquid bio-fuel. Liquid fuel is easy

to transport to a central facility where it can then be processed to generate hydrogen. Currently, we lack the scientific basis for efficient, small-scale biomass conversion to hydrogen.

Both biomass and fossil fuel-derived hydrogen causes carbon dioxide emissions

into the atmosphere, unless we find efficient and economic methods for carbon sequestration. To avoid the carbon dioxide emission altogether, and free the Nation

from the need to import oil, our ultimate goal has to be production of hydrogen from

water, an abundant carbon-free source of hydrogen, relying on solar or nuclear energy to split water into hydrogen and oxygen. There are many existing methods to

generate hydrogen from water, but at present, they are not economical on a large

scale. There is tremendous opportunity for innovative basic research. For example,

imagine the discovery of a new photocatalytic material that can efficiently split

water and generate pure hydrogen, relying on ‘‘free’’ solar energy. The economic and

strategic impact of such a discovery would be staggering! We have the finest academic research infrastructure in the world that can be engaged in this type of high

risk/high reward research challenge.

Storage. Hydrogen storage is arguably the key to the commercialization of fuel cell

powered automobiles and light trucks. While some progress has been made over the

last decade, the present practical storage limits of approximately 5 wt% are nearly

a factor of two lower than targets established by the automobile industry. Materials

that appear to hold promise for achieving hydrogen storage capacities near 10 wt%

include carbon nanotubes, graphite nanofibers and metal-organic framework materials. Exploiting the potential of these materials will require a fundamental understanding of the hydrogen storage mechanisms.

Fuel Cells. Most of the engineering challenges for fuel cells including the design

of electrode assemblies, and fuel-oxidizer-water-waste flows have been met. The

major challenges that remain, including durability, efficiency, and tolerance to impurities, can only be addressed by discovering and developing new and better performing materials. These challenges represent a significant opportunity for catalyst

and materials research. This research would benefit from the use of surface science

and computational chemistry methods. Specific hydrogen fuel cell research challenges include the discovery and development of better performing, low cost cathode

catalysts to reduce the over-potential at practical operating currents, and membranes with higher proton conductivities, better mechanical strength and longer life

that do not require high pressures to maintain hydration above 80°C. It is also important to develop anode catalysts that have significantly reduced Pt loadings and

are more tolerant to impurities in the hydrogen gas.

Hydrogen Internal Combustion Engines. Hydrogen has great potential as an alternative fuel for internal combustion engines (ICE) operating either in the conventional, spark-ignition (SI) or compression ignition modes. Published results have

shown that hydrogen burning ICEs can accomplish thermal efficiencies in the range

of 45-50% with virtually no emissions other than NOX. With its extreme lean flammability and low ignition energy, H2 allows ultra lean combustion to be realized in

SI engines at the low temperatures needed to minimize NOX production. In addition, engine load can be controlled by changing the charge quality thus removing

throttling and significantly improving the part load efficiency. The very high octane

value of hydrogen can be used to realize a higher compression ratio for high thermal

efficiency without knocking. However, hydrogen’s combustion properties also pose

some significant challenges for utilization in ICEs. In particular, due to its low ignition temperature, hydrogen can lead to pre-ignition and backflash, especially as a

lean fuel/air mixture approaches stoichiometric levels, thus limiting the output from

hydrogen burning ICEs. The power density of a hydrogen ICE is also limited by volumetric efficiency considerations. Fundamental research is needed to demonstrate

the improvement in thermal efficiency and reduction in pollutant formation as a result of hydrogen combustion in ICEs, and to address the associated scientific and

engineering challenges through well coordinated experimental and modeling efforts.

New technologies such as hydrogen direct injection, supercharging and hybridization

also need to be investigated. In parallel, the potential for utilizing hydrogen-augmented hydrocarbon fuels in compression ignition ICEs, and also hydrogen’s role in

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reducing cold start emissions and enhancing the performance of after-treatment devices should be investigated.

Center Educational Program on Hydrogen Energy Technologies

Each center would bring together faculty from multiple disciplines, including

chemical engineering, materials science, mechanical engineering, chemistry, natural

resources, business, and public policy. These disciplines would be the basis for a rich

crosscutting educational program addressing energy-related issues. In addition, the

joint research projects with industry will make them an ideal tool for exploring innovative approaches to engineering and business education, including electives that

cut across traditional disciplinary boundaries. The ability to mix students with different backgrounds in team-oriented research is critical in educating future engineers, scientists, and business managers in the fast-breaking and rapidly changing

area of alternative energy.

Further, in both undergraduate and graduate programs, multi-university multidisciplinary distance learning and virtual-laboratory experiences should be employed in the development of special course sequences addressing alternative energy

systems.

Industry and Government Outreach and Collaboration

Strong industry and government involvement in the Centers is critical in terms

of research relevancy and to facilitate technology transfer. Two key objectives of

each center’s industrial and government program will be a), to facilitate the timely

transfer of promising research developments to industry and government and b), to

support an active collaboration in each Center’s research and education programs.

Industry membership in the center implies an active working partnership in the

research and development of the key technologies and major research issues that

will enable the development of alternative energy technologies. In a typical center,

members would be entitled to the following benefits:

• Early awareness of new developments in alternative energy research

• Preferential access to center-generated intellectual property

• Facilitated access to students

• Web access to the Center’s alternative energy information clearinghouse

• Priority access to Center research facilities and personnel

• Potential membership on the Center Executive Committee

• Preferential access to distance learning and educational programs

• Participation in a neutral forum for researchers, designers, builders, suppliers,

and end-users

• Significant leveraging of company R&D through federally funded research programs

• Participation is topical technology workshops, seminars, and conferences.

Technology Transfer. When at all possible, Center research projects would be carried out with industry in order to accelerate the development and broad dissemination of challenging, high-risk alternative energy technologies that offer the potential

for significant commercial payoffs and widespread benefits for the Nation.

Where state support of research projects is available, ‘‘technology accelerator’’

grants could also be awarded to university-industry teams for the purpose of accelerating the development and implementation of emerging or enabling technologies

within the given state. Thus, they would not only further the research but would

promote economic development as well.

To facilitate the transfer of center technology to industry and government application, all center research projects will be strongly encouraged to organize on a ‘‘Quad’’

concept. Essentially, this means that any individual research project undertaken by

the Center at any of the participating universities shall require the active participation of four entities: faculty, students (graduate or undergraduate), industry engineers or scientists, and government engineers or scientists as depicted in Figure 1.

The basic rationale for using the Quad is that technology is much more effectively

transferred if all parties are involved in its development from inception to implementation.

Conclusion

A university-based Hydrogen Energy Research Initiative that broadly focuses on

the Nation’s energy research and education needs will provide a significant intellectual impetus and capital to the country’s pressing energy needs. It will also significantly leverage federal research dollars. Basic research carried out in research universities provides the foundation for the research, development, and commercialization continuum. Importantly, it facilitates technology transfer by moving new discoveries and innovations from the laboratory to the market place, and encouraging

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1For Example, (1) City of Las Vegas Public Works; (2) California Fuel Cell Partnership, Sacramento, California; (3) Sunline Transit District, Palm Springs, California; (4) Toyota Motor

Sales, Torrance, California; (5) National Fuel Cell Research Center, University of California,

Irvine, California.

industry partnerships to develop promising technologies. For our Nation, it is of critical strategic and economic importance that the academic, industrial, and government sector work together to assure that we lay a strong research foundation, permitting us to select the best pathways and technologies leading to our hydrogenbased energy future.

NATIONAL FUEL RESEARCH CENTER

UNIVERSITY OF CALIFORNIA, IRVINE

July 7, 2003

The Honorable JOE BARTON

Chairman

Subcommittee on Energy and Air Quality

Committee on Energy and Commerce

U.S. House of Representatives

Washington D.C. 20515-6115

DEAR REPRESENTATIVE BARTON: In response to your letter dated June 16, 2003,

attached please find my response to the questions presented.

Please advise me should you desire additional assistance.

Sincerely,

SCOTT SAMUELSEN, Director

Professor of Mechanical, Aerospace, and Environmental Engineering

Question 1: If one wanted to start a commercial hydrogen fueling station, what

regulatory obstacles might prevent one from opening it?

Response: While hydrogen filling stations have been established and are operating,1 use is restricted and not available to the general public. Commercial stations

will emerge with conditional use this calendar year. The National Fuel Cell Research Center (NFCRC), for example, is under contract from the South Coast Air

Quality Management District (AQMD) to establish two such stations.

The regulatory obstacles that dissuade opening a commercial station are (1) the

lack of codes and standards for public use of hydrogen dispensing, and (2) the lack

of national coordination to assure standardization across the country of applicable

codes. There are approximately 44,000 code jurisdictions within the United States.

Today, local regulatory bodies, unfamiliar with a product or technology, request substantial and unique documentation which substantially delays approvals and affects

competitive positions in the market.

As a result, there is a strong need for nationally standardized codes and standards for public use of hydrogen dispensing that are coordinated on an international

basis. The U.S. Department of Energy (DOE) has contracted with the National Hydrogen Association (NHA) to work on this process with its members from industry

and government. Hydrogen has been safely generated, distributed, and utilized in

industrial applications for decades. The challenge now is to establish codes and

standards designed for public use of hydrogen.

The NHA Hydrogen Codes and Standards Coordinating Committee was established to coordinate the diverse activities by the large number of organizations involved in developing and adopting codes for hydrogen technologies. In addition, The

International Standards Organization Technical Committee 197 has been working

to adopt international standards for hydrogen technologies. Ongoing efforts to establish standards are focusing on establishing safe handling practices, facilitating

standard interfaces, eliminating barriers to international trade, and developing

quality criteria and testing methods.

The NFCRC supports these efforts but encourages Congress to establish a path

that will assure hydrogen codes and standards for public use are deployed and

standardized as a national initiative.

Question 2: Are hydrogen fuel cell vehicles allowed to drive through tunnels?

Response: The NFCRC is not aware of travel restrictions for driving hydrogenfueled fuel cell vehicles through tunnels at the current time. The reasons are twofold. There are neither restrictions nor permits for such travel due to the novelty

of hydrogen-fueled vehicles. A similar question is raised with regard to parking hydrogen fuel vehicles in public structures or in residential garages. Such considerations are integral to the development of codes and standards for the public use of

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hydrogen, in this case the ‘‘utilization’’ of hydrogen versus the ‘‘dispensing’’ of hydrogen raised by Question 1.

We expect the codes and regulations for hydrogen-fueled vehicles in tunnels to

mirror the codes and regulations established for compressed natural gas (CNG) vehicles.

Question 3: What about trucks carrying compressed or liquid hydrogen cargo?

Response: There are restrictions on the transportation of hydrogen that vary from

state to state. The Department of Transportation (DOT) standards are in place for

transporting various gases and chemicals and can be superceded by local agencies

such as the California Highway Patrol at their discretion.

Question 4: Can we trust ordinary people to fuel their own car at a hydrogen

pump, or do we need specially trained technicians?

Response: Today, ordinary people with proper training refuel their vehicles with

Compressed Natural Gas (CNG). The procedure is expected to be similar for hydrogen refueling. In the early stages, steps must be taken to educate the public on the

procedures for compressed-gas refueling. While this is accomplished today for CNG

refueling, CNG vehicles (with few exceptions) are operated within fleets and the

training is thereby facilitated. As hydrogen-fueled vehicles become ubiquitous in society, special procedures will be required to assure public safety. For example, in

licensing a hydrogen-fueled vehicle, the owner may be required to complete refueling

training. In addition, professional staff may be necessary at hydrogen refueling stations for the first decade in order to assure a robust public education process.

Question 5: Is it safe to park a fuel cell vehicle inside a garage?

Response: With reasonable safety measures, such as adequate roof top ventilation,

yes. However, codes and standards must be established to specify the ventilation required and assure that building codes accommodate the appropriate specifications.

Question 6: Why or why not? What needs to change to make it safe?

Response: Hydrogen has a long history of safe usage in the chemical and aerospace industries. As with any fuel (e.g., gasoline, natural gas, propane), an understanding of the properties, proper safety precautions and established rules are key

to its successful safety track record.

By their nature, all fuels have some degree of danger associated with them. The

safe use of any fuel focuses on preventing situations where the four combustion factors—ignition source (spark or heat), oxidant (air) fuel, and confinement are present.

Hydrogen has properties that make it safer to handle and use in many regards

than the fuels commonly used today. For example, hydrogen is non-toxic. In addition, because hydrogen is much lighter than air, it dissipates rapidly should it be

released, allowing for relatively rapid dispersal of the fuel in case of a leak. The

properties of hydrogen that do require additional engineering and controls include

its wide range of flammable concentrations in air and lower ignition energy than

gasoline or natural gas, which means hydrogen can ignite more easily in the absence of appropriate ventilation. As a result, adequate ventilation and leak detection

are important elements in the design of safe hydrogen vehicles and vehicle storage

facilities. The unusually high fuel pressures associated with the early deployment

of hydrogen-fueled vehicles will require aggressive codes and standards for the fuel

tanks to assure controlled rupture in the case of an unscheduled penetration. Other

commonly practiced safety issues, such as those associated with fuels used today

would also apply, such as avoiding ignition sources.

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